New York Fed survey shows job-finding confidence hits record low as inflation expectations tick up
A New York Fed consumer expectations survey found households became more pessimistic about the labor market in December, with job-finding expectations falling to a series low. At the same time, short-term inflation expectations rose, adding to concerns about near-term economic conditions.
Labor market sentiment weakens
Americans’ confidence in their ability to find work quickly deteriorated in December, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. The survey found the perceived probability of finding a job after losing one fell to a new series low, underscoring a more anxious outlook even as some measures of personal financial sentiment improved.
The decline was especially pronounced among households earning under $100,000 and among older respondents, highlighting how labor market unease is not distributed evenly. At the same time, respondents indicated a higher perceived probability of job loss than in the prior month, suggesting that worries are rising on both sides of the employment equation.
Inflation expectations edge higher
Alongside the labor market concerns, the survey showed near-term inflation expectations increased. The one-year-ahead expectation rose to 3.4%, up from 3.2% the prior month, reflecting continued sensitivity to price changes and the possibility that households anticipate slower progress on inflation.
For businesses and policymakers, this combination—softening job confidence and slightly higher inflation expectations—can complicate the picture. Employers may hesitate to expand hiring if demand looks uncertain, while households may pull back on discretionary spending if they feel less secure about income and employment prospects.
Why the survey matters
The New York Fed’s monthly survey is closely watched for early signals about consumer behavior and perceptions. Shifts in expectations can influence spending decisions, wage demands, and broader confidence, which in turn affect the economy’s momentum.
While the survey does not directly measure job growth, it captures a key ingredient of economic durability: whether households believe they can replace income if displaced. A persistent slump in job-finding confidence can become self-reinforcing if it leads to reduced spending and higher precautionary saving.