Long-term unemployment is surging in the U.S. There are hidden costs for workers and the economy

In recent weeks, Parker Taylor reached a grim milestone in his work history.

The 29-year-old had been employed consistently since he was a teen, first on a factory floor and most recently in medical sales. But the St. Petersburg, Florida, resident hasn't been able to land a new gig after losing his job shortly before the 2025 Thanksgiving holiday.

Taylor is now one of the more than 1.8 million Americans classified as long-term unemployed — which the government defines as jobless for at least 27 weeks — in a given month this year. That figure is up about 45% from 2019 and 55% from 2023, a CNBC analysis of Bureau of Labor Statistics data found.

"This can't go on much longer without some type of catastrophic change to my life," Taylor said. "That this era of my life could affect my long-term future — my family's future, my future children's future — is something that I go to sleep thinking about."

Without a steady income, Taylor's retirement planning and long-term investing strategy has come to a "screeching halt." He's significantly cut back on spending for everything from food to social experiences to make ends meet. Taylor said he's applied to around 100 jobs and has completed several interviews to no avail.

On a macro level, the growing number of Americans in this boat raises red flags about the strength of the labor market and overall economy. For the long-term unemployed, it can have ramifications on financial, emotional and family health that linger even after they reenter the workforce.

"It tells us a lot about economic health," said Cory Stahle, an economist at job site Indeed. "It tells us about how good of a job the labor market is doing at absorbing people."

The long-term unemployed account for roughly one out of every four jobless workers, according to the latest available U.S. government data. Friday's nonfarm payroll report will offer a fresh reading of the U.S. labor force's makeup. Reports released this week on job openings and private payrolls came in stronger than economists anticipated.

Long-term unemployed workers' pay was approximately 32% lower after a decade than those who had not lost work, according to a working paper from the Boston Federal Reserve. Those who were unemployed for shorter periods took a 9% cut over the same time frame.

Studies also show there may be a link between long-term unemployment and depression. A Pew Research report found that the long-term unemployed were over two times more likely to seek professional help for depression or other mental health challenges compared with those without work for under three months.

"Other than the death of a family member or a close friend, this is one of the most devastating things that people face," said Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University. "It's a very serious health problem and an economic problem."

Research also shows how unemployment — particularly over long stretches — can negatively impact families and communities.

Parental job loss increases the chance that their child will repeat a grade by about 15%, a working paper found. A study of Wisconsin state data found workers displaced in their prime years are less likely to participate in social and community events. Communities with a larger percentage of long-term unemployed people have a higher rate of crime and violence, the Urban Institute reported.

Ana Febres-Cordero said her mental health worsened since she lost her social media job over a year ago. The 29-year-old has pulled back on outings with her friends to conserve savings and relies on her boyfriend to shoulder housing costs. The Chicago resident took up dog walking and hobbies like coloring to ensure she leaves the house and keeps a routine.

"I don't think people might realize how much it affects the individual," said Febres-Cordero, who estimates completing more than 300 job applications. "It breaks down your confidence."

Hundreds of miles away, Lindsay Acker of Asbury Park, New Jersey, has fallen behind on student loan and credit card debt payments after losing her health industry job in September. The 38-year-old said she's moved to a Medicaid healthcare plan with marketplace insurance no longer affordable.

She's dipped into her retirement account to cover necessities after her unemployment payments ended. Acker said she's delayed conversations about family planning as it now feels out of reach financially.

"I am not the same person I was when I lost my job," Acker said. "I've lost my spark. I've lost my happiness. I've lost my ability to see joy."

The long-term unemployed no longer qualify for most unemployment benefits, which are typically capped at 26 weeks, according to William Congdon, a labor economist and senior fellow at the Urban Institute. Even if these workers are actively job hunting, he said, they face stigma from employers due to the gaps on their resumes.

A rising number of long-term unemployed workers is a feature of the "low-hire, low-fire" labor market, according to Indeed's Stahle. Federal labor data shows job opening and hiring rates have tumbled from pandemic-era peaks, signaling that work opportunities are drying up.

The long-term unemployed group also includes new college graduates struggling to land their first roles, Stahle said. Recent college graduates last had an unemployment rate of 5.6%, outpacing the broader average of 4.2%, according to the New York Fed.

The national economy could suffer as a result of more people being without jobs this long, Stahle said, as they will likely curtail spending. Consumer spending makes up about two-thirds of the U.S. gross domestic product.

Even for those like Deborah Yu who have reentered the workforce, the stress of being without work for so long still shows up in big and small ways.

The San Francisco Bay Area resident said she once bought lunch during the work week without a second thought, but now feels like it's an unnecessary expense. She pushed off considerations about buying a house out of fear of being on the hook for a monthly mortgage if she became unemployed again.

"It's been a transformative experience," said Yu, who began a new job in March after being laid off in mid-2025. "I think about money now on a deeper level."