Job Seekers Face Long Waits: Why Finding Work is Taking Months Now
While the unemployment rate is sitting at a historic low, the reality for countless out-of-work Americans is far from rosy. A significant number are finding it increasingly difficult to land new jobs, raising concerns about the stability of a labor market that once buzzed with opportunity. Factors like soaring borrowing costs have forced employers to rethink their hiring strategies.
Staggeringly, nearly 40% of the 7 million Americans who were out of work in October—around 2.84 million individuals—have been job hunting for over 15 weeks. This marks a 20% increase from last year, as reported by the Bureau of Labor Statistics. Even more alarming, over half of these job seekers have been searching for more than 27 weeks—almost half a year!
The extended job search is becoming the new norm. Companies, particularly in tech and professional services, are tightening their belts and putting hiring plans on hold. “It’s a world away from the vibrant job-switching spree we witnessed in 2021 and 2022, known as the ‘Great Resignation,’” explains an expert from ZipRecruiter, highlighting the stark contrast in today’s employment landscape.
This cooling job market is largely a byproduct of the Federal Reserve’s stringent monetary policies. With borrowing rates hitting their highest levels in 23 years, businesses are feeling the pinch. Although inflation has notably decreased over the last two years and the Fed recently started cutting interest rates, consumers are curbing their spending on significant investments like cars and homes, further straining the economy.
The current job market is characterized by “low hiring, low firing, and low job-switching,” a scenario described as a “big stay” environment—fantastic for those who love their jobs, but a challenging reality for those still searching.
In October, employers took a step backward by adding only 12,000 jobs, marking the weakest hiring month since December 2020. The sluggish job growth can be attributed to factors like Hurricanes Milton and Helene, as well as significant labor disputes, including the Boeing machinists strike.
As the nation gears up for the November 5 elections, many Americans are expressing skepticism about the strength of the economy—a sentiment that played a role in President-elect Donald Trump’s ascent. With inflation on the minds of voters, the unemployment rate creeping up from a pandemic low of 3.4%, and many workers feeling that their wages haven’t kept pace with inflation, it’s clear that the job market is increasingly a focal point of discontent.
However, since the election, perceptions of the economy have shifted positively, especially among Trump supporters, according to CBS News polling.
November’s Jobs Report
On the horizon is the upcoming November jobs report, set to be released this Friday. Economists are predicting an addition of 207,000 new jobs last month, with the unemployment rate expected to steady at a low 4.1%.
“The overarching trend in the labor market has been a slow cooling, and the real question is whether this pattern will emerge clearly in Friday’s data,” the ZipRecruiter economist noted, alluding to the effects of the storms and labor strikes on business operations.
In a stark contrast, nearly 60,000 jobs were cut last month—a 27% increase from the same time last year. The automotive and tech sectors bore the brunt of these layoffs, according to outplacement firm Challenger, Gray & Christmas.
“The automotive industry faces pressing challenges, including potential tariffs affecting U.S. automakers, fierce competition from Chinese electric vehicle manufacturers, and shifts in government subsidies for EVs,” stated a senior vice president of Challenger, Gray & Christmas.
The Job Market and Interest Rate Cuts
The softening labor market has pushed the Federal Reserve to initiate rate cuts starting in September—marking the first reduction in four years. This was followed by a second cut in November, with many economists predicting yet another decrease at the Fed’s meeting on December 18.
Analysts from BNP Paribas suggest that the job market is currently navigating a period of uncertainty, much of it stemming from pre-election jitters.
“In September, a survey revealed that 30% of businesses were scaling back investment plans amid uncertainties surrounding the election,” they reported while hinting at expectations for yet another rate cut this month.
However, some economists are re-evaluating their forecasts for how rapidly the Fed might reduce rates in 2025, especially in light of President-elect Trump’s intentions to impose tariffs, cut taxes, and tackle the issue of illegal immigration, which could potentially reignite inflation.
