Unemployed office workers are having a harder time finding new jobs

The U.S. economy has added over two million jobs in the past year, but more individuals out of work are facing challenges returning to employment. On average, it now takes approximately six months for someone to find a job, which is about a month longer than during the post-pandemic hiring surge in early 2023, according to the Labor Department. These difficulties are particularly pronounced in high-paying white-collar sectors such as tech, law, and media. These industries expanded quickly when the economy reopened but now have a reduced demand for new hires.

Federal Reserve Governor Adriana Kugler emphasized that the fight against inflation is ongoing, while Richmond Fed President Tom Barkin expressed optimism for the economy's growth prospects in the coming year. Meanwhile, former Fed Chairman Ben Bernanke suggested that the Trump administration's upcoming economic policies are unlikely to cause significant changes in inflation.

As of November, over seven million Americans were unemployed and actively seeking work, with more than 1.6 million of them searching for jobs for six months or longer, the Labor Department reported. The number of long-term unemployed has risen by more than 50% since the end of 2022, signaling growing challenges for job seekers in certain sectors.

Although the U.S. economy has shown signs of improvement, Federal Reserve officials remain cautious about inflation. Speaking at an event in San Francisco, Adriana Kugler acknowledged the progress made but reiterated that inflation is still above the Fed’s 2% target. "We’re fully aware that we’re not there yet," she stated. San Francisco Fed President Mary Daly added that many economists, including herself, had underestimated the persistence of inflation caused by supply shocks, which they traditionally viewed as short-term issues.

Richmond Fed President Tom Barkin offered a more optimistic perspective, highlighting his expectation for more economic growth in the coming year. Barkin attributed his positive outlook to robust consumer spending, which he believes will sustain healthy economic expansion in the months ahead. He also noted increased business optimism, likely driven by expectations of continued growth.

Former Fed Chair Ben Bernanke weighed in on the potential impact of Trump administration policies on inflation. Speaking at the same San Francisco event, Bernanke suggested these policies would likely have only a modest effect. He pointed out that the tax cuts enacted in 2017, which Trump intends to extend, are already in place. Changes to immigration policy and import tariffs might cause disruptions in specific sectors like agriculture and construction, but their overall impact on inflation and the broader economy is expected to be limited.