I feel for you and all the others out there in your same position. It can be demoralizing. I was in the same boat a few years ago, and this might help:
Apply to jobs, even if they are not perfect. If you get an interview, look at it as practice (so you can "nail" future interviews). If you don't really "want" the job, the pressure's off. Look at part-time work. Open your job search to include a "slump buster" job. Sometimes it takes a little momentum to get going. I started working from 4am-8am at a part time gig, and then everything opened up. I got 2 more part-time jobs and finally landed a full-time position with one of the part-time companies.
Gamify the whole process. Make a spreadsheet to track your job applications. Set a goal for yourself each day by identifying the places you want to apply to—put them on your spreadsheet FIRST and then just get it done. No emotional attachment—that makes the process so long and stressful.
Look at this "time off" as a gift. (I know that sounds stupid), but being grateful and enjoying time to reflect, practice self-care, and dream about your future goals can instill clarity and motivation in the craziest ways. There are so many things you can do that don't cost money (think visiting your favorite store to browse, walking in a nearby park, etc.) and these things are necessary, not luxuries.
All my best on your job search. I've been there, and I support your process, whatever that might be.
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