The latest survey from the Federal Reserve Bank of New York shows troubling signs in the U.S. labor market.
From the Bloomberg article, “Expectation of Losing One’s Job at Record High in NY Fed Survey.”#economy #jobs #employment #EconTwitter pic.twitter.com/nz2qMr3qNb
— Mohamed A. El-Erian (@elerianm) August 19, 2024
The survey, conducted in July, reveals a decrease in employment rates, rising concerns about job security, and growing dissatisfaction with pay. According to the survey, only 88% of those employed in March still had jobs in July, the lowest retention rate since data collection began in 2014.
NY Fed survey shows the share of individuals who reported searching for a job increased to the highest level in the 10-year history of the survey
Among those with jobs, the average expected likelihood of becoming unemployed also jumped to a series high https://t.co/bf1jTTj1I4 pic.twitter.com/yzHvcmJzyW
— Nick Timiraos (@NickTimiraos) August 20, 2024
The expectation of becoming unemployed rose to 4.4%, an increase of 0.5 percentage points from a year ago, reaching the highest level in the survey’s history. Job-seeking activity has also increased, with 28.4% of respondents searching for a new job within the past four weeks, up 9 percentage points from the previous year—a new high since March 2014. Dissatisfaction with wages was a prominent issue.
Satisfaction with current compensation dropped to 56.7%, declining more than 3 percentage points from the same period in 2023. Benefits satisfaction also fell to 56.3%, down by over 8 points from the previous year.
New York Fed labor survey results
"This shows that even though part of the increase in respondents’ reservation wages is due to inflation, there has still been a rise in the minimum compensation respondents require to accept (new) job offers in real terms" https://t.co/UxFIHLlNnF pic.twitter.com/TEyJSzIyKy
— Scott Lincicome (@scottlincicome) August 20, 2024
Opportunities for promotion saw a significant drop in satisfaction, falling to 44.2% from 53.5% in 2023, especially among women, those without a college degree, and respondents with household incomes below $60,000. The typical wage offer for full-time employment has slightly decreased to $68,905. However, the average “reservation wage”—the minimum level of pay workers would accept for a new job—rose to $81,147, an increase of about $2,500 from a year ago but still below the record high recorded in the previous survey.
Findings also suggest changing attitudes toward retirement. The expected likelihood of working past age 62 rose to 48.3%, while 34.2% of respondents anticipate working past 67, an increase of over 2 percentage points. Despite the current unemployment rate of 4.3% being considered low by historical standards, it has been on an upward trend.
Nonfarm payroll data for July showed an increase of just 114,000 jobs, heightening anticipation for the August report due in early September. Recently, Fed officials characterized job growth as having “moderated,” indicating potential changes in monetary policy. The central bank is expected to lower its key borrowing rate by a quarter percentage point at its next meeting in September, marking the first decrease in more than four years.
