Nancy Meredith, who spent 17 years at a Washington, D.C.-based software company, was laid off more than two years ago, along with millions of others whose jobs were cut after the U.S. economy took a nose dive.

"I finally stopped looking," Meredith said of her nearly year- long job hunt, when she sent out countless resumes and got very few bites.

While Meredith has made her financial situation work with freelance jobs, her story underscores a vicious economic trend: the longer people are jobless, the harder it is to get full-time work.

Indeed, with the U.S. economy stuck in the doldrums, many employers are reluctant to hire those out of work longer than 27 weeks -- a group economists call as the "long-term unemployed" -- on the perception that their skills have become rusty.

And for job seekers who for months or even years continue to pound the pavement in search of a full-time job, the odds can seem so overwhelming that many give up.

Friday's lackluster jobs report underscored the issue. While the unemployment rate ticked down by one-tenth of a percent to 8.2 percent, the drop was spurred not by a rise in job creation, but by people who left the workforce. The unemployment rate is calculated based on the number of active job hunters.

"The untold story remains the low level of the participation rate in the labor force,"said Andy Busch, a global currency and public policy strategist at BMO Capital Markets, referring to those who give up seeking work out of sheer frustration.

The latest jobs report saw the number of long-term unemployed remain virtually unchanged at 5.3 million in March, according to the U.S. Bureau of Labor Statistics. While the number has fallen by 1.4 million since April 2010, it accounts for 43 percent of the unemployed, and is still massive.

Not much hard research exists on why companies are less apt to hire those out of work for long stints, but Heidi Shierholz, economist at the Economic Policy Institute, said many employers believe skills can become rusty, although that perception may not gel with reality.

Employers could also view a two-year gap in an applicant's resume as a red flag, believing it says something negative about the applicant, Shierholz added.

With so many people desperate for work, all bargaining power is in the employer's court and companies can have their pick from a plethora of qualified candidates, she said. Firms may even look for ways to weed out applicants, just to manage the tsunami of resumes that comes with every job opening.

Meredith said self-defeatism can also play a role in people's ability to find work.

"It's harder for people to find work after an extended layoff because after not hearing anything from companies, people start doubting their skillset and may apply for fewer jobs,"she said.

DOWNTURN TO HAUNT VICTIMS FOR GENERATIONS

While the U.S. economy painstakingly claws itself out of the hole, many will feel an impact even decades after the downturn and its aftermath have run their course.

The statistics are surprising. People who were unemployed during the recession and found new jobs in 2010 saw their earnings plummet a whopping 21.8 percent, noted Shierholz.

"(Being unemployed) is a real setback that lowers your lifetime earnings. It takes people very long to get back on track. It can take a couple of decades to get on the path you would have been on (if you had not been laid off)," Shierholz said.

That's because people who have been out of work for long periods are more likely to grab any job they can get, which means an inclination to accept lower pay.

Downturns can affect both younger and older workers. For those near retirement, it may be too late to make up for lost cash during an extended jobless stint.

For recent college grads, being stuck in temp jobs for lengthy periods may cause them to struggle their entire careers to catch up to their peers.

"If you enter the work force during a downturn, it can take a couple of decades before you get back on the track that you would have been on otherwise, and you never get that money back," Shierholz said.

Children of the long-term unemployed can also feel the sting, as downturns can create a set of factors that will snowball into the next generation.

In the United States, for example, getting a good high school education often means living in a good school district, which costs money.

Laid-off workers forced to mortgage their homes may relocate to lower-quality school districts, reducing their children's chances of entering good colleges and landing high-paying jobs.

"The kids of parents who lose their jobs during a downturn have lower lifetime earnings," Shierholz said.