Out-of-work Americans are increasingly struggling to find employment, especially in white-collar office jobs.
The latest U.S. Bureau of Labor Statistics reading states that as of November 2024, around 7.1 million Americans were unemployed. These are individuals without work who are actively looking to enter the job market.
More than 1.6 million had been searching for a job for at least six months, over 50% more people compared to the end of 2022.
On average, it takes roughly six months to secure a job in today’s market. That is around one month longer than it took in early 2023 when the labor market enjoyed a post-pandemic boost.
The Labor Department says high-paying white-collar jobs in sectors that grew quickly after the pandemic lockdowns, like tech, no longer require the same level of new hires.
High-paying tech jobs have been in the spotlight recently over increasing concern over the abuse of H-1B workers and its implications for American workers. In Texas, for example, nearly 10% of Tesla’s 2,000-strong workforce are H-1B visa holders.
In early 2022, there were roughly two job postings for every unemployed American.
Today, there is around one.
Even still, the unemployment rate sits at a reasonably healthy level of 4.2%, far below the average witnessed during the decade leading into the pandemic.
While plenty of service positions are available, like those in hospitality or healthcare, office jobs are harder to find as managers lean out operations to cut costs. In some cases, artificial intelligence takes on more of the load.
More Americans are also leveraging unemployment benefits for longer. As of late December, 1.8 million people renewed their benefits, one of the highest levels since the end of the pandemic economic fallout.
The labor market is not so much challenged by layoffs as it is by slowing hiring, says Veronic Clark, an economist at Citigroup. Of course, companies could also decide to cut existing roles.
“The pessimistic way to look at weak hiring is that businesses are trying to reduce labor costs. If that’s the reason, why shouldn’t we get to that layoff stage at some point?” Clark said, per The Wall Street Journal.
Despite inflation remaining above the Federal Reserve’s target goal of 2%, the central bank began unwinding interest rates in September, citing an excess supply of labor and slowing wage growth. At 4.25%- 4.5%, interest rates are now back to the same level as December 2022, though they remain far above the near-zero level seen before the rate tightening campaign began.