The Kobeissi Letter Reports Highest Long-Term Unemployment in the U.S. Since 2021
The Kobeissi Letter indicates that the number of Americans unemployed for 27 weeks or more increased by 155,000 to 1.99 million in May, the highest since December 2021.
This represents a year-on-year increase of 524,000, marking the largest annual increase since August 2021; this group now accounts for 27.5% of total unemployment, the highest since December 2021, having risen by 9 percentage points since the beginning of 2023, exceeding most post-recession peaks.
In market mechanisms, cautious hiring by companies and structural skill mismatches are driving employers to reduce the supply of long-term positions, while job seekers are extending their search times; under event-driven circumstances, funds are shifting from consumption and housing to defensive savings and government support, benefiting flexible sectors of the short-term labor market while putting pressure on long-term unemployed individuals and low- to middle-income families reliant on wages.
Source: Public Information
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The Kobeissi Letter has continuously tracked U.S. employment data and has previously warned of the risk of a rebound in long-term unemployment after 2021, having observed similar structural issues during the post-pandemic recovery period that led to increased re-employment difficulties, consistent with historical cycles of skill and geographic mismatches.
In terms of capital pathways, resources from companies and investors are concentrating on automation and high-skill positions, optimizing costs by reducing reliance on low-matching labor, motivated by the need to cope with economic uncertainty and enhance productivity, while long-term unemployed individuals face income disruptions that further suppress consumption and credit.
Similar to the high long-term unemployment rates post-2008 that prompted policy interventions and retraining pathways, as well as the peak observed early in the pandemic, the current U.S. labor market is transitioning from post-pandemic recovery to structural differentiation.
Essentially, this reflects capital concentration, where companies are aggregating resources towards high-productivity positions and capital-intensive sectors through technology and automation, which amplifies skill barriers and reshapes labor pricing power, leading to further concentration of wealth and opportunity at the top.
ABAB News · Cognitive Law
While short-term unemployment appears cyclical, it is the long-term unemployment rate that truly tests the resilience of economic structure. Companies sell automation to reduce labor costs, the middle class guards wages, and top-tier firms lock in productivity premiums through structural advantages. The market is not lacking jobs; it lacks matching and adaptation; winners reshape labor pricing power through capital concentration.