Concerns about the economy are shifting from inflation to jobs

When the Federal Reserve cut interest rates for the first time in four years last Wednesday, Chairman Jerome Powell outlined the big change: “As inflation has declined and the labor market has cooled, the risks of rising inflation have diminished and the risks of decrease for employment increased”.

Although consumers are not anticipating an impending recession, they still feel bad about their employment prospects. You might be able to attribute some of that to the rollercoaster of the white-collar job market: In 2021, money was free to borrow and firms struggled to outbid, meaning Americans could switch jobs relatively easily. labor and land acquisitions.

However, the labor market has cooled. Year over year, employment has fallen in the information sector, which encompasses many aspects of the technology industry, as some firms make layoffs and many hires slow.

Job seekers can feel the difference. According to the Conference Board, the share of consumers who say jobs are plentiful has declined since August, falling from 32.7 percent to 30.9 percent. At the same time, 18.3 percent of consumers surveyed said jobs are hard to come by, up from 16.8 percent in August. The measure’s “persistent decline” is “a clear sign that the labor market is nowhere near as tight as it once was,” Wells Fargo economists Shannon Seery Grein and Jeremiah Kohl wrote in a Sept. 24 note.

This deterioration likely reflects “consumer concerns about the labor market and reactions to fewer hours, slower wage growth, fewer job openings — even as the labor market remains fairly healthy, with low unemployment, few layoffs and high wages ”, Dana M. Peterson. , the Conference Board’s chief economist, said in a statement.

Consumers also anticipate more gloom in the coming months, according to the Conference Board; 13% expect their income to fall over the next six months – up from 11.7% who said the same in August.

This consumer confidence data comes as more Americans are looking for jobs. The July iteration of the New York Federal Reserve’s Survey of Consumer Expectations found that the percentage of Americans who had looked for a job in the past four weeks reached its highest level since March 2014.

Meanwhile, Americans felt less confident in their ability to find a job if they lost it today, according to the Survey of Consumer Expectations, with their average likelihood of finding a new role falling from in early 2023.

This makes sense when considering the potential opportunities. According to the latest Job Openings and Turnover Study, there were 7.7 million job openings in July 2024, down 1.1 million jobs from the previous year. In July 2023, the intelligence branch had 158,000 job openings; this number dropped to 113,000 in July 2024.

It’s not all bad news (and vibes), though. The Federal Reserve has finally cut rates, which could dampen employment — and make it cheaper for consumers to pay off their credit cards or get a lower mortgage rate. And worker investment could at least increase as the stock market hits record highs. Even so, however, it will take some time for the new monetary policy to seep into everyday life and the labor market.

“This is a job market where if you have a job you like, you’re in a pretty good position,” Julia Pollak, chief economist at ZipRecruiter, previously told BI. “If you don’t have a job, if you’re a recent graduate, finding a job is actually unusually difficult — especially in the private sector outside of healthcare.”

Are you having trouble finding a job or is the job market making you feel bad? Contact this reporter at [email protected].