The latest indication of trouble for the US labor market has seen record-low confidence in the ability to move from one job to another, according to a New York Federal Reserve survey released Monday.
Respondents to the Central Bank’s monthly survey of consumer expectations in August showed that they had a 44.9% chance of finding another job after losing their current job. Reading fell 5.8 percentage points from the previous month, the lowest in the history of a survey date back to June 2013.
The results further show the reversal of the “big resignation” that occurred between 2021-22. According to figures from the Bureau of Labor Statistics, that number was 3.2 million in July, down more than 5% from the pace that was a few years ago.
“Consumers feel about job opportunities, but those feelings are perfectly appropriate,” says Elizabeth Rayner, senior economist at consumer site Nerdwallet. “It’s very difficult to find a job right now, and it’s unlikely that it will improve anytime soon. Employers are not very employed, so workers are hugging their jobs and sticking to their current jobs because the market is not popular with job seekers.”
Various factors that were active during Covid Pandemic influenced high levels of mobility, including inconsistency in supply and demand in the labor market, where they saw two or more open jobs per available worker.
However, the labor market based on virtual outages has ended the trend. There are not many indications that employers are laying off workers on a large scale, but employment has slowed dramatically. Workers remained at work as uncertainty about inflation and economic growth led employers to be more cautious about increased pay.
More workers are now available than job openings.
Other parts of the Fed’s survey reflect trends. The chances of voluntary quitting work next year have remained largely unchanged, from just 0.1% points to 18.9%. At the same time, expectations for unemployment to rise to 39.1% over the next year have risen 1.7 percentage points since July, surpassing the 12-month average.
The results follow the gloomy non-farm salary counts in August.
On Friday, the Bureau of Labor Statistics reported just 22,000 new jobs that month, well below 75,000 forecasts. Additionally, the June count fell to 13,000 losses, the first monthly decline since December 2020. The unemployment rate rose to 4.3%, but the broader level, including discouraged workers and minors, rose to 8.1%.
The market is widely hopeful that the Fed will address the weakness of the labour market with its first interest rate cut since December 2024, when it decides the rate for September 17th.
