More Americans are looking for jobs as unemployment concerns rise to their highest level in a decade.
According to a new survey released by the Federal Reserve Bank of New York on Monday, the average expected likelihood of becoming unemployed in the next four months reached its highest level in the survey’s 10-year history, rising to 4.4% compared to 3.9% in the year-earlier period.
The expected likelihood of moving to a new employer also increased, rising to 11.6% last month from the 10.6% seen in July 2023.
More respondents are also actively on the job hunt, with 28.4% saying they’ve been searching for a new job over the past four weeks — the highest level since March 2014 and an increase from 19.4% in July 2023.
The survey, which also noted decreased satisfaction with wage compensation, non-wage benefits, and promotion opportunities at respondents’ current jobs, comes as the Federal Reserve weighs recent labor market weakness with the unemployment rate now at 4.3%.
Economists and strategists have warned any further deterioration of the labor market would likely have a negative spillover effect to markets and beyond.
“The problem is that we continue to see weakness in the labor market and we think that that’s going to ultimately be what drives this market lower,” Ahmed Riesgo, chief investment officer at Insigneo, told Yahoo Finance on Tuesday.
“We know that the US consumer is doing OK, but the US consumer is doing OK because they still have a job. The second that the employment market flips from one of surplus to one of deficit, which is something that we think we’re rapidly nearing, we think the US consumer, unfortunately, will falter.”
But others disagree, pointing to recent data points that paint a much different picture of the economy.
Consumer prices have continued to to ease closer to the Fed’s 2% inflation target. Positive retail sales data for the month of July showed the consumer is still spending. Consumer confidence is rebounding. And recent filings for initial unemployment benefits have fallen more than expected.
“We’re coming off unusual lows [in the unemployment rate] following a very unusual time during the pandemic,” Joe Brusuelas, chief economist at RSM, told Yahoo Finance on Tuesday, noting hiring needed to slow in order to return to price stability. “A lot of the rules that some of these so-called forward-looking investors use aren’t really going to work this time because the economy is in a very different place.”
