Unemployment concerns are rising sharply among American workers, with a recent survey from the Federal Reserve Bank of New York showing that the average expectation for a higher U.S. unemployment rate one year from now jumped to 44 percent in March. This marks the highest level since April 2020, during the height of the COVID-19 pandemic. The perceived likelihood of becoming unemployed in the next 12 months also increased to 15.7 percent, with the sharpest rise among households earning less than $50,000 annually. Meanwhile, the average probability of voluntarily leaving one’s job rose only slightly to 18 percent, suggesting increased job insecurity and caution about switching roles in an uncertain economy.
These rising concerns come despite recent labor market strength, as the March jobs report showed an unemployment rate of 4.2 percent and 228,000 new jobs added. However, the Federal Reserve and some Wall Street economists expect conditions to weaken over the coming years. The Fed raised its unemployment forecast for 2025 to 4.4 percent, and JPMorgan’s Michael Feroli projects a rate as high as 5.2 percent. Inflation expectations are also climbing, with the NY Fed survey showing a rise in the year-ahead inflation outlook to 3.6 percent. While recent data indicated a temporary slowdown in inflation, economists warn that newly enacted tariffs, particularly those targeting China, could soon reverse that trend and contribute to a period of stagflation—slowing growth, persistent inflation, and rising unemployment that continues to weigh heavily on consumer and investor sentiment.
source: https://finance.yahoo.com/news/americans-braced-for-biggest-unemployment-rate-jump-since-the-pandemic-as-tariffs-muddy-outlook-150803197.html
4 comments:
It’s concerning to see unemployment fears rising even as the job market still looks relatively strong—this mismatch really highlights how uncertain and fragile people feel about the economy right now. Rising inflation expectations and talk of stagflation only add to the unease.
I read something about unemployment and job postings a couple of weeks ago. It mentioned that jobs were being posted, but companies weren’t actually hiring over the past few months. It will be interesting to see what will happen to the economy in the next few years.
The fact that 44% of people expect unemployment to rise while actual unemployment remains relatively low shows how much uncertainty is brewing beneath the surface. It is reminiscent of the early pandemic phase, when fear and volatility outpaced actual job losses until the losses hit hard. The sharpest increase in fear of job loss among those making under $50,000 annually highlights how economic turbulence tends to hit the most financially fragile first. There is Stagflation Watch, which talks about the looming concern about stagflation. This results in the nasty combo of inflation and rising unemployment. Tariffs on Chinese goods could push prices up again, even as hiring slows, creating a squeeze on both consumer purchasing power and business confidence. There is a growing undercurrent of anxiety, especially among lower-income households. In sectors more sensitive to economic slowdowns, there is vulnerability like retail, hospitality, or certain kinds of manufacturing. The Voluntary Quit Rate is at 0.18 right now, which shows that people are getting more cautious. In addition, this restraint of the Voluntary Quit Rate Stagnation is another signal of growing unease. Even though the headline unemployment numbers like the Unemployment Rate or Urate=4.2% and job gains look solid on the surface, they still lead to wage gaps and Voluntary Quit Rate Stagnation. This disconnect between strong labor data and rising unemployment fears suggests that American workers are bracing for impact, even if it has not fully materialized. The heightened anxiety means that policymakers, businesses, and economists would do well to pay attention not just to what the data says but to how people are feeling.
Americans are more worried about losing their jobs now than at any time since the pandemic, with fears rising as Trump’s new tariffs create economic uncertainty and talk of stagflation. With so many expecting higher unemployment, will these tariffs end up hurting workers more than helping the economy?
Post a Comment