With more sailors staying in the military amid a slumping economic recovery, the U.S. Navy is taking the unprecedented step of firing midlevel service members to help rein in spending.

The Navy plans to let go of 3,000 sailors with between seven and 14 years of experience after economic uncertainty put the service in the unusual position of having a manpower surplus.

The move comes as a new government report shows that the unemployment rate ticked up to 9.2 percent -- marking 29 straight months that number has been over 8 percent and a record streak since the Great Depression.

In August, the Navy will convene a board to review the cases of 16,000 sailors and eliminate 3,000 positions, about 1 percent of the force. Navy officials say the jobs cuts will be based on experience and individual performance records.

It's a complete reversal for the military, which just four years ago at the height of the fighting in Iraq, had a hard time meeting its recruiting goals. At the time there was talk of the Army being spread so thin it would not have enough fighters to conduct its wars. Now with the White House aiming to cut spending and pull troops out of Iraq and Afghanistan, the need for more men has diminished.

Rep. Mike Coffman, who sits on the House Armed Services Committee and served in the Marine Corps, says it's not a good situation for those young sailors.

"There's no retirement for them and... there's no severance for them," Coffman said. "So essentially they're with so many other Americans on unemployment."

Coffman told Fox News it's not unusual for the military's retention rates to go up during bad economic times, but he called this particular case "unprecedented."

"It's never gone up to this level where so many people, the vast majority of people want to stay in the United States Navy."

The Air Force retention rates are also up to a 6-year high, causing it to convene a similar reduction-in -force board. The Air Force will review the records of more than 9,000 officers, mostly majors, and roughly 400 are expected to be let go.

Fox News military analyst and retired Maj. Gen. Bob Scales, says it all boils down to pressure on Washington to save money and simple arithmetic.

"The quickest way to reduce the budget for the military is to cut people," Scales said. "They can be pulled out of the ranks immediately and the savings are immediate. Whereas when you try to cut programs often times for new weapons systems it takes years, if not decades, to get all that money back."

The retention rate for sailors with one to six years of service rose 10 percent from 2005 to 2010. And the Navy is overstaffed in 31 different job categories: jet engine mechanics, avionics technicians, electricians.

"What we're seeing in the Navy is just the tip of iceberg for all the services," Scales said. "The Air Force and the Navy have gone down in strength over the last few years and as the troops return from Afghanistan and Iraq and as pressure mounts on the defense budget, we're going to see similar consequences for the ground services."

Former Defense Secretary Robert Gates announced in January that as the wars come to a close in 2015 the Pentagon has plans to cut active-duty soldiers by 27,000 and reduce the Marine Corps by roughly 15,000.

In October, the Army will begin cutting its ranks by 22,000 -- and that means even more job seekers in a market with fewer and fewer good jobs.