The US economy isn’t officially in a recession. But for job seekers, it might as well be.
In February, the hiring rate fell to a low last seen during the early pandemic — and before that, the aftermath of the Great Recession.
More than seven million unemployed Americans are facing a job market that, by hiring measures, looks like a recession. Meanwhile layoffs and unemployment are relatively low, creating a split labor market that is stable for people who have jobs, and recession-like for those trying to find one.
This combination of slow hiring and low unemployment is unprecedented in more than 25 years of government data.
The “job seeker recession” is taking a financial toll on people like Valerie Lockhart, who has struggled to find work since being laid off as a vice president at Morgan Stanley in March 2025. As the primary earner for her family of three, she’s relied on savings, retirement accounts, and unemployment benefits to get by.
After her garage flooded last September, Lockhart faced thousands of dollars in plumbing repairs. She launched a GoFundMe campaign, but it only raised a few hundred dollars. As a result, she delayed the repairs, leaving her family without hot water.
“Paying that bill would’ve meant using money we needed to stay afloat,” said Lockhart, who is in her 40s and lives in Georgia.
Over the past year, I’ve spoken with dozens of job seekers navigating a sluggish hiring landscape shaped by economic uncertainty, cost-cutting, and AI adoption. Many told me they were surprised by how little traction they’ve gotten after more successful searches earlier in their careers.
As of March, more than a quarter of unemployed Americans had been looking for work for 27 weeks or more, up from about 18% three years earlier. The statistic underscores how the slow pace of hiring is keeping people out of work longer.
A slowdown without recession-level support
Since being laid off from his six-figure consulting job at Booz Allen Hamilton last August, Aaron Laniewicz has struggled to land a full-time role. Within months, he withdrew about $50,000 from his 401(k) to pay down high-interest debt, much of it from credit cards.
“Our finances are trending in an unsustainable direction,” said Laniewicz, who’s in his 40s and lives in North Carolina.
His experience reflects the broader disconnect in the labor market. While layoffs remain low, people who need work are finding the hiring environment has slowed to a crawl.
In past downturns, that kind of slowdown has triggered government support. During the pandemic, federal lawmakers added a $600 weekly supplement to state unemployment checks. During the Great Recession, Congress funded additional weeks of unemployment insurance, allowing some workers to collect benefits for up to 99 weeks.
But barring a wider economic downturn, a new round of expanded benefits is unlikely, particularly with a divided Congress and concerns about the level of government spending.
Without federal benefits to rely on, US job seekers are reliant on severance from former employers or state unemployment benefits. But those can vary widely.
Laniewicz said he received about a month of severance. He collected unemployment benefits for a time — North Carolina has a maximum weekly payout of $350 — but said he became ineligible after finding part-time freelance work.
After Robin Peppers Daniel was laid off from her North Carolina-based management role at Wells Fargo in April 2025, she received a few months of severance. After months of job searching, she began working as a substitute teacher, but said she had to be strategic about it. If her earnings exceeded a certain threshold, her unemployment check would shrink.
Daniel, who is in her 60s, said she has enough savings to get by for more than a year, but not enough to retire. She said she’s now only “half-heartedly” looking for jobs online: If a posting has more than 100 applicants, she doesn’t bother to apply.
For Daniel, who’s now been looking for work for a year, it feels like the job market has turned against her.
“I’ve resigned myself to semi-retirement,” she said.
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