US Labor Market Shows Persistent Structural Weakness, Threatening Economic Stability
Event summary
- The number of long-term unemployed (27+ weeks) rose to 1.9 million in December 2026, a 400,000 increase year-over-year.
- 5.3 million individuals are involuntarily working part-time, up nearly 1 million from a year prior.
- 6.2 million people are outside the labor force but want a job, a 684,000 increase year-over-year.
- First American Properties CEO Michael Eisenga highlighted these trends in a statement released January 12, 2026.
The big picture
First American Properties' CEO's commentary underscores a concerning divergence between headline employment figures and the underlying health of the U.S. labor market. The persistent issues of long-term unemployment, underemployment, and discouraged workers suggest a lack of durable job creation and a potential drag on broader economic growth, which will impact real estate demand and investment decisions. These trends highlight the need for a more nuanced assessment of economic resilience beyond simple job counts.
What we're watching
- Consumer Spending
- The continued prevalence of involuntary part-time work and discouraged workers will likely constrain consumer spending, impacting demand for housing and commercial properties.
- Policy Response
- The degree to which policymakers address the structural issues in the labor market will significantly influence the pace of economic recovery and the stability of real estate values.
- Household Formation
- The rise in long-term unemployment and discouraged workers will likely depress household formation rates, impacting demand for both rental and owned housing.
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