Recent government figures suggest the job market is stabilising, but that's of little consolation to the 1.8 million Americans who currently qualify as long-term unemployed. The designation applies to workers on the hunt for at least six months, and their ranks have climbed to 1 out of every 4 job seekers. That's the highest level in three years, and it's taking a financial and emotional toll, with one worker describing the process to CNBC as "a mental war." The problem may not abate anytime soon, thanks to a stagnant market.
US job numbers were just revised down by 1,029,000 for 2025. That's the largest annual revision in at least 20 years.
Combined with -818,000 in 2024 and -306,000 in 2023, that's 2.15 million jobs that were reported, used to justify policy and then quietly erased. Since 2019, 2.5 million jobs have been revised out of official data, with downward revisions in 6 of the last 7 years.
For context, the 2009-2010 revisions during the worst financial crisis since the Depression were roughly -1.2 million combined. The last three years alone are nearly double that.
Every rate decision, every "resilient labour market" narrative, every political talking point about job creation was built on numbers that didn't exist.
The official ratio of job openings to unemployed is 0.87. That already means more people than jobs. But that 0.87 was calculated using data we now know was overstated by over a million. The real number is worse. And the direction is accelerating — job openings hit 6.5 million in December, the lowest since 2017, with professional services down 21.8% and finance down 25.1%.
History tells us what happens next.
At 0.7 — which the real data may already be approaching — you enter the zone the US hit after the 2001 recession. Unemployment benefits begin to be exhausted faster than new openings appear. Long-term unemployment starts compounding. Consumer confidence doesn't gradually decline — it drops off a cliff. The 2001 recession produced a "jobless recovery" that took until 2005 to close the gap. That was with a housing boom pulling people into construction. There is no equivalent engine today.
At 0.5 — two unemployed people per available job — you're in late 2008 territory. This is where Lehman Brothers collapsed. Mortgage defaults spiked. Consumer spending contracted at the fastest rate since WWII. Retail chains began mass closures. Congress passed emergency legislation (TARP) because the financial system was seizing up. Property crime across developed economies increased measurably — the UN documented that over 60% of countries experiencing economic downturn in 2008/2009 saw short-term increases in at least one crime type, with some categories doubling.
At 0.3 — where the US sat through most of early 2009 — three people compete for every job. Long-term unemployment (27+ weeks) triples. Social services are overwhelmed. Suicide rates increase. Emergency unemployment benefit extensions are passed because the standard 26 weeks is no longer sufficient. People begin dropping out of the labour force entirely — not because they've found work, but because they've stopped looking. The official unemployment rate actually improves while the real situation deteriorates. The data lies again.
The 0.87 isn't the destination. It's the departure point.
Desperation among “white-collar” job seekers (and among college grads, to a lesser extent) is something I witnessed back in 2008 during the Great Recession when I was myself a recent college grad working, IRONICALLY, at a job posting and career services site…
And desperation is something I often witness these days again in whatever job market phase we’re in right now (I’m sure someone will coin a snappy phrase for it, if they haven’t already).
Desperation makes people do things they wouldn’t have considered under so-called “normal” circumstances.
One of the things about long-term unemployment is that, technically, job seekers have the time to customise their job search and resume, they have the time to network and take online courses and develop themselves…
But being unemployed for a long time takes a toll on one’s confidence and health (physical, mental, and social), and sometimes the “having too much time on your hands” part is a curse, not a blessing.
To be sure, not everyone unemployed has tons of free time (e.g., some are busy as caretakers, volunteers, or are tending to their own challenges)… but I digress.
And desperation is something I often witness these days again in whatever job market phase we’re in right now (I’m sure someone will coin a snappy phrase for it, if they haven’t already).
Desperation makes people do things they wouldn’t have considered under so-called “normal” circumstances.
One of the things about long-term unemployment is that, technically, job seekers have the time to customise their job search and resume, they have the time to network and take online courses and develop themselves…
But being unemployed for a long time takes a toll on one’s confidence and health (physical, mental, and social), and sometimes the “having too much time on your hands” part is a curse, not a blessing.
To be sure, not everyone unemployed has tons of free time (e.g., some are busy as caretakers, volunteers, or are tending to their own challenges)… but I digress.