U.S. consumers grew sharply more anxious about the labor market last month, pushing one key pessimism measure to its highest point since the early months of the COVID-19 pandemic, according to a Federal Reserve Bank of New York survey.
The New York Fed’s Consumer Expectations Survey for October revealed that expectations for a higher unemployment rate one year from now reached levels not seen since April 2020.
Respondents indicated a greater perceived likelihood of losing their jobs involuntarily, though that specific metric remained at relatively modest levels. At the same time, surveyed households felt slightly more optimistic about their chances of landing a new job quickly if they were to face unemployment.
This underlying labor market anxiety coincided with stubborn inflation expectations that continue to outpace the central bank’s targets. Consumers surveyed in October projected inflation to sit at 3.9% one year out, 3.3% in three years, and 3% five years from now, matching figures from September.
Price forecasts for specific household staples proved mixed, with survey participants anticipating more moderate gasoline price increases over the coming year than they did the month prior. Meanwhile, the U.S. government reported that October job growth reached 165,000 positions, pushing the unemployment rate down to 4.1% as recent hiring data was revised upward.
Federal Reserve officials have frequently characterized the current macroeconomic environment as a market of low hiring and low layoffs. Households surveyed reported a slight uptick in their current financial situations compared with September, while expectations for their financial health a year ahead held steady.
Consumer perceptions regarding current and future credit access saw no movement throughout October.
Economic Indicator October Survey Data Prior Comparison Unemployment Rate (National) 4.1% Declined alongside 165,000 new jobs added 1-Year Inflation Expectation 3.9% Unchanged from September 3-Year Inflation Expectation 3.3% Unchanged from September 5-Year Inflation Expectation 3% Unchanged from September.
The New York Fed survey remains a closely watched bellwether for consumer sentiment and inflation psychology.
