Layoffs Are Rare, but Finding a New Job Takes Longer

American employers added just 29,000 jobs in September, NPR reported, a pace so slow that there is now roughly one job opening for every 244 unemployed workers. The unemployment rate sits at a historically low 4.2%, yet for people who lose their jobs, the path back to work is growing longer — and unemployment benefits are running out before paychecks resume.

That paradox sits at the center of a U.S. labor market that economists describe as not collapsing but frozen: companies are hesitant to hire, and the workers caught outside the door are finding the welcome mat pulled in.

A Sluggish Hiring Picture

The September employment report, covered by NPR, showed hiring far below what forecasters had expected, with job gains for July and August revised down by a combined 60,000 positions. Even healthcare, which has been a steady engine of job creation, added only 17,000 jobs last month.

“The good news is you’re not seeing a lot of layoffs,” Sarah House, a senior economist at Wells Fargo, told NPR. “But it’s really hard if you are one of those workers who loses your job or you’re new to the labor force or you’re coming back, there’s not a lot of turnover. So it makes it harder to get your foot in the door right now.”

Behind the headline numbers lies a more troubling trend: a rising share of the unemployed have been out of work for a long time. Of the 7.3 million people who were unemployed in August, 25.7% had been jobless for at least 26 weeks, according to Labor Department data reported by HuffPost. Of the more than 7 million unemployed nationwide, nearly 2 million have been out of work six months or longer.

Workers Describe a Frustrating Search

For Evan Smith, who lost his job at a Colorado RV dealership this past spring after the company was sold, the search has become a full-time job in itself — one that rarely pays off.

“You find something that you’re excited about or something that you think fits your profile and you go in and over 100 people have already clicked ‘applied for it’ in the last two weeks,” Smith said. “So you just feel like you’re a number.”

Cheryl Huff, laid off from a Colorado state government job about four months ago, has applied for dozens of positions, spending hours tailoring her resume to each one. She has landed only a handful of interviews, all by telephone, and a stream of what appear to be automated responses. Once, she received two messages at once from the same employer — one saying her application was under review, the other saying the job had already been filled.

“That’s one of the frustrations that people are having,” Huff said. “Did you even look at my stuff?”

Even a low unemployment rate offers little comfort to those living through it. “When you’re one of the people that doesn’t have a job, it doesn’t really matter what the percentage is,” Huff said. “It’s impacting your life in a big, big way.”

When Benefits Run Out

The financial clock ticks loudly for the jobless. Huff is paying $1,300 a month to maintain her old employer-provided health insurance, and her unemployment benefits are set to expire in early December. Colorado offers six months of benefits; North Carolina offers less than three.

In Raleigh, Keke Moore lost her job as a meeting planner last December and has been out of work nearly a year. North Carolina caps benefits at $350 a week, and even that limited aid has now expired. Her 21-year-old son, who works part time, has been helping with household bills.

“With so many people being out of work, we’re all out here, it feels like to me, fighting for scraps,” Moore said. “Bless his heart, he does have a part-time job, so he’s been doing what he can to help his mama out. But I mean, I feel like a failure as a parent, because it’s like I don’t want him worrying about bills.”

A Market That Won’t Thaw

The roots of the slowdown reach back several years. When the Federal Reserve began raising interest rates in 2022 to fight inflation, borrowing became more expensive and rate-sensitive sectors — housing and mortgage origination among them — shed workers. Paulina Drake, a 60-year-old mortgage underwriter in Los Angeles, has been unemployed since 2022 and says her resume gap and her age now shut her out of both her old field and retail or grocery jobs.

“I have been trying anything to get to work, but mortgage companies won’t hire me because I’ve had this gap,” Drake said. “I can’t get into any other fields because I have no experience doing anything. Right now, I am equivalent to a 15-year-old high school student trying to get a job.”

Federal Reserve Chair Jerome Powell has acknowledged the strain. “The overall job finding rate is very, very low,” he said, warning that if layoffs do pick up, the lack of hiring elsewhere could “very quickly flow into higher unemployment.” As HuffPost noted, the Fed enacted a quarter-point rate reduction as labor-market weakness mounted.

The Cost of Long-Term Joblessness

Economists warn that extended unemployment leaves lasting marks. Lindsay Owens, an economist and director of the Groundwork Collaborative, said the damage goes beyond the immediate loss of a paycheck.

“Long-term unemployment scarring effects show up in future job performance, in well-being measures later on,” Owens said. “We have a whole host of information about the health impacts of long-term unemployment, including increased likelihood of chronic pain.”

A rising long-term-unemployment share — combined with higher joblessness among new workers and minorities — is widely viewed as a warning sign of a weakening labor market and rising recession risk.

What to Watch

The coming months will test whether the frozen market thaws or hardens. Economists will be watching the monthly jobs reports for any pickup in hiring, the Fed for further moves on interest rates, and the long-term-unemployment share as the clearest signal of whether more Americans are sliding into the ranks of the permanently sidelined. For workers like Smith, the stakes are personal: “Keeping a good attitude, I think, is huge,” he said. “Getting discouraged is really freaking easy.”