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Individuals have a harder time finding jobs after long absences.
CNBC · 2026-08-09
Why falling long-term unemployment is a bad sign for the job market Skip Navigation Markets Pre-Markets U.S. Markets Currencies Prediction Markets Cryptocurrency Futures & Commodities Bonds Funds & ETFs Business Economy Finance Health & Science Media Real Estate Energy Climate Transportation Investigations Industrials Retail Wealth Sports Life Small Business Investing Personal Finance Fintech Financial Advisors Options Action ETF Street Buffett Archive Earnings Trader Talk Tech Cybersecurity AI Enterprise Internet Media Mobile Social Media CNBC Disruptor 50 Tech Guide Politics & Policy White House Policy Defense Congress Expanding Opportunity Video Latest Video Full Episodes Livestream Live Audio Live TV Schedule CNBC Podcasts CEO Interviews CNBC Documentaries Digital Originals Watchlist Investing Club Trust Portfolio Analysis Trade Alerts Meeting Videos Homestretch Jim's Columns Education Subscribe PRO Pro News Josh Brown Mike Santoli Calls of the Day My Portfolio Livestream Full Episodes Stock Screener Market Forecast Options Investing Chart Investing Subscribe Livestream Menu Make It select USA INTL Livestream Search quotes, news & videos Livestream Watchlist SIGN IN Create free account Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Personal Finance Falling long-term unemployment isn't good news, economists say — what it means for jobseekers Published Fri, Aug 7 2026 1:48 PM EDT Greg Iacurci @GregIacurci WATCH LIVE Key Points Long-term unemployment fell in July, according to the July 2026 jobs report issued Friday by the Bureau of Labor Statistics. The national unemployment rate also declined from June, the BLS said. Evidence suggests the decline was due to the "wrong" reasons, such as job seekers withdrawing from the labor pool because of difficulty finding a job in the current low-hire market, economists said. Job seekers wait in line to enter a job fair on June 30, 2026, in Carson, California. Justin Sullivan | Getty Images News | Getty Images Long-term unemployment fell in July — which, on its face, sounds like a good thing. But labor market data suggests otherwise, economists said. In fact, long-term unemployment appears to have declined for the "wrong" reasons, they said. The number of people unemployed for 27 weeks or more — the official barometer of long-term unemployment — fell by 64,000 people from June to July, to about 1.8 million people, the Bureau of Labor Statistics said Friday. Of all unemployed workers, 25.5% are long-term unemployed, down sharply from 27.3% in June. watch now VIDEO 3:48 03:48 U.S. economy unexpectedly lost 23,000 jobs in July Squawk Box But those downward moves seem to be driven by an exodus of workers from the labor force, and that would be a negative trend for households and the economy, experts said. "We are in this low-hire environment where people are having a really hard time," said Cory Stahle, a senior economist at Indeed, a job site. "We're maybe seeing a case where people are saying, 'I just can't find a job, so I'm just going to stop looking,'" he said. "If I've been unemployed for seven, eight, nine, 10 months, at what point will I take a break from that because it's not yielding a whole lot?" Read more CNBC personal finance coverage Some high earners will soon owe taxes on years of deferred capital gains Does the 4% retirement withdrawal rule still work? How to best maximize income EVs aren't following the 'law of used cars.' What it means for buyers, sellers Housing's K-shaped economy: Luxury sales rise as starter-home buyers struggle CNBC's Financial Advisor 100: Best financial advisors, top firms ranked CNBC Elite Advisors: Top ultra-high net worth wealth management firms for 2026 The decline in long-term unemployment echoes the drop in the broader national unemployment rate to 4.1% in July, down from 4.2% the prior month. "The unemployment rate fell for the wrong reasons," Heather Long, chief economist at Navy Federal Credit Union, wrote in an analysis of the jobs report. "People continue to leave the labor force. Labor force participation is at the lowest level since February 2021." Evidence suggests workers have become disillusioned by the difficulty of finding a job in the current "low hire" labor market and are dropping their job search altogether, economists said. Such workers aren't counted as unemployed, since unemployment is a measure of the people who are jobless and also looking for work. All else equal, this makes the unemployment rate look artificially low. "A jobless rate that falls because people stop looking for work is not the same as one that falls because people found jobs," Jason Pride, chief of investment strategy and research at Glenmede, a wealth management firm. The risks of long-term unemployment A job seeker at a job and resource fair in Los Angeles, California, on July 29, 2026. Patrick T. Fallon | Afp | Getty Images Withdrawal from the labor force due to discouragement poses financial risks at a micro and macro level. The long-term unemployed are generally ineligible for unemployment benefits after six months, and perhaps even sooner depending on the state. Such people would be without their regular income from work as well as social assistance, putting financial stress on households at a time when gasoline prices and the overall inflation rate remain elevated, economists said. watch now VIDEO 8:23 08:23 Experts react to the July jobs report Squawk Box Individuals also generally have a harder time finding jobs after long absences, and the long-term unemployed tend to earn less when they eventually find a new job, economists said. Meanwhile, "it's really hard to continue growing [the] economy if [you] don't have the workers to support that growth," said Stahle. Other signs of a tough job market Employer hiring has been muted since 2024, according to federal data. Since then, the hiring rate has hovered at its lowest levels since 2014. Meanwhile, layoffs have been historically low, creating little churn and leaving fewer vacancies for job seekers. Job growth has also been relatively muted. Employers have added 26,000 jobs per month, on average, in the 12 months from August 2025 to July 2026. The average was 66,000 the prior year, and 142,000 the one before, according to federal data. Hiring also hasn't been broad, making it especially tough for workers outside fields like healthcare that are adding jobs with more regularity, economists said. "Hiring displays little sense of active momentum, and with some concentrated contributions that we have highlighted in prior months (in areas like healthcare), there is some hiring happening, but it is concentrated," Rick Rieder, head of the Global Allocation Investment team at BlackRock, a money manager, wrote in an analysis Friday. Ultimately, it's a good time to have a job — and not a good time to be out of one, Stahle said. One way job seekers might find more success in the current environment is by parlaying skills in industries that are hiring at a more rapid pace right now, Stahle said. For example, someone with information technology experience might consider looking for a job within a hospital system or elsewhere within the healthcare sector, he said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news. Subscribe to CNBC PRO Subscribe to Investing Club Licensing & Reprints CNBC Councils Select Personal Finance Join the CNBC Panel Closed Captioning Digital Products News Releases Internships Corrections About CNBC Site Map Podcasts Careers Help Contact News Tips Got a confidential news tip? We want to hear from you. Get In Touch CNBC Newsletters Sign up for free newsletters and get more CNBC delivered to your inbox Sign Up Now Get this delivered to your inbox, and more info about our products and services. Advertise With Us Please Contact Us Ad Choices Privacy Policy Your Privacy Choices CA Notice Terms of Service © 2026 Versant Media, LLC. All Rights Reserved. A Versant Media Company. 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