Updated

Updated · Reuters · Nov 9

NY Fed Survey Shows Jobless Fears Hit Highest Since April 2020 as Inflation View Holds at 3.9%

Updated

Updated · Reuters · Nov 9

NY Fed Survey Shows Jobless Fears Hit Highest Since April 2020 as Inflation View Holds at 3.9%

Q: Why are Americans suddenly terrified of losing their jobs even as inflation fears finally stabilize?

Americans are more worried about jobs because the labor market feels less secure even though inflation no longer looks like it is spiraling higher. The New York Fed’s October survey shows inflation expectations holding steady at 3.9% for the next year, 3.3% three years out, and 3.0% five years out. That suggests households think prices will keep rising, but not suddenly accelerate. The bigger shift was in employment: the average probability that unemployment will be higher a year from now rose to 45.3%, the highest since April 2020, while the perceived chance of losing a job also edged up. That anxiety matches a broader “low-hire, low-fire” economy. Layoffs remain relatively low, so the headline unemployment rate still looks decent. But hiring has slowed, job openings are down, quits are subdued, and workers are less confident they can move to something better. In that kind of market, even people who still have jobs feel exposed because losing one could mean a long search. Household finances are adding to the fear. Spending is still expected to rise faster than income, essential costs such as rent, food, medical care and college remain elevated, and the probability of missing a debt payment climbed to 13.8%. Credit also feels harder to access. That makes any potential job loss look more dangerous. So the fear is not really about a fresh inflation shock. It is about a cooling labor market colliding with high living costs, weaker wage momentum, and fragile household cash flow.

3 articles · Updated · Reuters · Nov 9

October respondents were the most likely since April 2020 to expect higher unemployment a year ahead, the New York Fed said, marking a sharp deterioration in labor-market sentiment.
That shift came even as one-year inflation expectations held at 3.9%, with three- and five-year views steady at 3.3% and 3.0%, keeping price expectations above the Fed's 2% target.
Consumers also saw a higher chance of involuntary job loss, though still relatively low, and a better chance of finding new work after losing a job.
The survey contrasted with Friday's government report showing 165,000 jobs added in October and unemployment edging down to 4.1%, while households said current finances improved slightly and credit access was unchanged.