The first economic report of the week came from the Federal Reserve Bank of New York’s Survey of Consumer Expectations.
Many of the headlines focused on inflation. Consumers expect prices to rise 3.5% over the next year, down slightly from 3.6% in the previous survey.
To be honest, I’m not sure that tells us consumers are feeling much better about inflation.
Gasoline prices remain elevated. Insurance costs continue to rise. Many grocery bills are still noticeably higher than they were a few years ago. A change from 3.6% to 3.5% doesn’t strike me as a major shift in how people feel when they’re filling up the car or paying monthly bills.
What caught my attention was the job market portion of the survey.
Respondents estimated only a 43.7% chance of finding a new job within three months if they lost their current one. Put another way, a majority of respondents believe they would still be looking for work three months later.
Think back to 2021 and 2022 when “Help Wanted” signs seemed to be everywhere and employers were struggling to find workers. Today’s labor market feels different. Jobs are still available, but workers appear less confident they could quickly find another one if needed.
That doesn’t necessarily mean people think a recession is coming. In fact, the current labor market still feels like what I’ve been calling a “no hire, no fire” environment. Employers continue to hire, but many are doing so cautiously. At the same time, we are not seeing widespread layoffs.
As someone who has spent several months looking for part-time work, I can understand why some workers might feel this way. Jobs exist, but finding one that fits your schedule, pay expectations, location, and skills can take time.
The survey also made me wonder if inflation has simply moved to the back seat while concerns about income security have moved up front.
After all, when you don’t have a paycheck coming in, inflation isn’t taking up much of your energy. Your focus shifts to finding a job, replacing lost income, and paying the bills.
Different groups will likely view this survey differently. New graduates entering the workforce may be focused on finding that first opportunity. Workers who have been laid off may be concerned about how long it will take to replace their income. Retirees, on the other hand, may be more concerned about inflation and how long their savings will last.
The survey suggests that consumers remain cautious. Inflation is still a concern, but job security and confidence in finding new work appear to be taking up more space in people’s minds.
We’ll get a much closer look at inflation on Wednesday when the Consumer Price Index (CPI) report is released.
What do you think? Are you more concerned about rising prices, job security, or both?
Learn More
- New York Fed Survey of Consumer Expectations
https://www.newyorkfed.org/microeconomics/sce
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