In the latest sign of trouble for the U.S. labor market, confidence in the ability to move from one job to another has hit a record low, according to a New York Federal Reserve survey released Monday.
Respondents to the central bank’s monthly Survey of Consumer Expectations for August indicated a 44.9% probability of finding another job after losing their current one. The reading tumbled 5.8 percentage points from the prior month and is the lowest in the survey’s history dating back to June 2013.
The result further demonstrates the reversal of the “Great Resignation” that occurred in 2021-22, when at one point 4.5 million workers a month were quitting their jobs and feeling good about finding new ones. That number stood at 3.2 million in July, well off the pace of a few years ago and down more than 5% from the same period in 2024, according to Bureau of Labor Statistics figures.
Various factors that had come into play during the Covid pandemic helped influence the high level of mobility, including a supply-demand mismatch in the labor market that saw more than two open jobs for each available worker.
But a labor market that has ground to a virtual standstill has ended the trend. While there are not too many signs that employers are laying off workers en masse, hiring has slowed dramatically. That has caused workers to stay put in their jobs as uncertainty over inflation and economic growth has caused employers to be cautious about growing payrolls.
There are now more workers available than job openings, something that hasn’t been the case since well before Covid.
Other parts of the Fed survey reflect the trend: The probability of leaving one’s job voluntarily over the next year was little changed, down just 0.1 percentage point to 18.9%. At the same time, expectations that the unemployment rate will be higher a year from now rose to 39.1%, up 1.7 percentage points from July and a point above the 12-month average.
The results follow a dismal August nonfarm payrolls count.
The Bureau of Labor Statistics on Friday reported just 22,000 new jobs on the month, well below the expectation for 75,000. Moreover, the June count was revised lower to a loss of 13,000, the first monthly decline since December 2020. The unemployment rate rose to 4.3% while a broader level that includes discouraged workers and the underemployed climbed to 8.1%, both the highest since October 2021.
Markets widely expect the Fed to respond to the labor market weakness with its first interest rate cut since December 2024 when it next decides on rates on Sept. 17.
