It’s taking months for millions of Americans to find a new job as the job market slows

The unemployment rate may be near historic lows, but hundreds of thousands of unemployed Americans are taking longer to find new jobs. That signals cracks in the once-hot job market as employers continue to grapple with the impact of higher borrowing costs.

About 40% of the 7 million people unemployed in October, or about 2.84 million people, have been looking for work for more than 15 weeks, up 20% from a year ago, according to Bureau of Labor Statistics data. More than half of these job seekers have been looking for a new job for more than 27 weeks, or about half a year.

A lengthy job search is becoming more common in today’s job market as companies hold back on hiring, particularly in some industries such as technology and professional services, Julia Pollak, chief economist at ZipRecruiter, told CBS MoneyWatch. It’s a far cry from the heady years of 2021 and 2022, when Americans changed jobs at a rapid pace in search of better pay and more fulfilling work, a trend known as “The big resignation.”

The labor market has since weakened under pressure from the Federal Reserve’s tight monetary policy, with the central bank raising lending rates to their highest level in 23 years to combat inflation, Pollak noted. As inflation has cooled rapidly over the past two years, the Fed began Interest rate cut in SeptemberPollak said the burden of higher borrowing costs has caused consumers to be reluctant to buy cars and homes, impacting key sectors of the economy.

Today’s job market is characterized by “low hiring, firing and turnover rates,” noted Pollak. “It’s a ‘big stay’ kind of situation – it’s great if you have a job you like, and it’s not great if you don’t have a job.”

Employers hired 12,000 workers in October, a jobs report that marks the weakest month for hiring since December 2020. As the paltry figure reflects, businesses were impacted by Hurricanes Milton and Helene, as well as labor disputes such as the Boeing machinists’ strike.

Ahead of the November 5 election, a majority of Americans held one dark vision the strength of the U.S. economy, a factor that contributed in part to President-elect Donald Trump’s victory. While voters’ anger focused largely on inflation, the labor market also played a role in their views: The unemployment rate rose slowly from a pandemic low of 3.4% and some workers said their wages had not yet caught up Inflation.

Since the election, however, voters’ views on the economy have changed have improvedparticularly among Trump supporters, CBS News polls have found.

November jobs report

On Friday, the Labor Department will release its November jobs report. Economists forecast 207,000 new hires last month, according to financial data firm FactSet. The unemployment rate is expected to remain stable at 4.1%, near a 50-year low.

“The general trend in the labor market is a slow, gradual slowdown, and the question is whether that will still be evident after these quirks are taken into account,” Pollack noted in Friday’s data, referring to companies’ post-mortem recovery Storms and labor strikes.

According to outplacement firm Challenger, Gray & Christmas, employers cut nearly 60,000 jobs last month, a 27% increase from a year ago. The automotive and technology industries saw the most layoffs last month, according to the group.

“The automotive industry is currently facing major challenges, including: possible tariffs for US car manufacturers with factories overseas, increasing competition from Chinese electric vehicle (EV) manufacturers and Shifts in government subsidies for electric vehicles“said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, in a statement.

The labor market and interest rate cuts

The slowdown in the labor market helped influence the Federal Reserve’s decision to begin cutting interest rates in September, which was crucial for the central bank first interest rate cut in four years. The Fed followed with a second rate cut in November, and a majority of economists predict another cut at the central bank’s Dec. 18 meeting.

According to analysts at BNP Parabas, the labor market may be in a period of uncertainty partly due to the election.

“In September, an Atlanta Fed/Duke University survey found that 30% of companies scaled back their investment plans due to uncertainty about the upcoming election,” the analysts wrote in a recent research report, noting that they are predicting another rate cut this month.

They added: “While we suspect that pre-election uncertainty has played a role in holding back hiring recently, this report (expected on December 6) may be too early to provide a clear release of previously postponed ones.” to reveal settings. Uncertainties about tariffs, immigration and taxes. “Policies remain.”

Still, some economists are reducing their forecasts for the pace of the Fed’s expected rate cuts in 2025, citing President-elect Trump’s plans to raise tariffs, cut taxes and deport millions of illegal immigrants who, if enacted, will stoke inflation again.