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Confidence in Economy in Short Supply 10/02 06:04
The official numbers show that the U.S. job market has proved sturdy in the
face of one shock after another -- President Donald Trump's trade wars,
persistent inflation, high interest rates, and a conflict with Iran that has
sent gasoline prices rocketing higher, squeezing family budgets.
WASHINGTON (AP) -- The official numbers show that the U.S. job market has
proved sturdy in the face of one shock after another -- President Donald
Trump's trade wars, persistent inflation, high interest rates, and a conflict
with Iran that has sent gasoline prices rocketing higher, squeezing family
budgets.
When the Labor Department releases hiring and unemployment numbers for
September, they're likely to be solid once again: Forecasters surveyed by the
data firm FactSet expect that employers -- businesses, government agencies and
nonprofits -- added 90,000 jobs last month and that unemployment remained low
at 4.1%.
Layoffs are rare, and most workers enjoy job security.
But ordinary Americans are not feeling it.
U.S. consumer confidence dropped this month to the lowest level in more than
a decade, according to an index published by the Conference Board. One reason:
More than 28% of the respondents told the business think tank that they expect
fewer jobs to be available in six months, double the 14% who expect more.
The online jobs site Glassdoor reports that its employee confidence index,
based on how workers view prospects for their own companies, dropped last month
to the lowest level in records going back to the beginning of 2016, a period
that includes a global pandemic. It was the index's third record low this year.
"Employee confidence has been continuously grinding downwards over the last
year as workers grow increasingly anxious about everything from layoffs to
AI,'' said Glassdoor chief economist Daniel Zhao.
The public discontent with the economy comes barely a month before voters go
to the polls for midterm elections that will determine whether Trump's
Republicans maintain full control over Congress. A Thursday poll from The
Associated Press-NORC Center for Public Affairs Research finds that only 17% of
U.S. adults approve of Trump's handling of the cost of living. Just 26% approve
of his handling of the economy overall, marking a new low.
The public's misgivings about jobs partly reflect an odd feature of the
current labor market: Employers aren't laying off many workers, but they aren't
hiring many either. A Labor Department measure of gross hiring -- before
subtracting those who quit or lose their jobs -- has been stuck in a rut for
more than two years.
So economists describe a " low-hire, low-fire '' job market in which those
who have jobs are mostly secure, but jobseekers struggle to find work. In
August, the average unemployed person had been out of work for more than six
months, the longest average stretch of joblessness since February 2022.
"People know that being laid off is unusually costly right now," said
Glassdoor's Zhao. "They hear from their friends how long they've been out of
work and had such a difficult time finding a job. That does make layoffs even
more scary than usual.''
In that chilly environment, fewer workers are willing to quit their jobs.
"They often feel stuck,'' Zhao said. "Workers aren't finding there's
opportunity on the open market to find a better job -- one that pays more or
offers better work-life balance.''
The weak hiring means more meager wage gains, too. Average hourly pay rose
just 3.1% in August from a year earlier -- the stingiest year-over-year
increase since May 2021.
Researchers at the Federal Reserve Bank of San Francisco reported in August
that the job search has become tougher for two groups that should be doing well
this deep into an economic expansion.
Normally at this point -- the last recession was six years ago -- employers
would need workers so badly they'd be willing to take a chance on applicants
who are young or have little experience or proven skills. But no: "Instead of
being pulled in, the pipeline into employment is shrinking such that the
recovery is no longer reaching workers at the margins,'' the researchers noted.
Moreover, the unemployed people who normally get back to work the fastest --
those in their prime working years (25 to 54) and with college educations --
are struggling to find new jobs.
The San Francisco Fed researchers aren't sure what's making the job search
so tough. They suspect it might have to do with Trump's immigration crackdown,
hiring slowdowns specifically at tech companies and government contractors,
"the early effects of AI-related displacement in professional occupations,''
uncertainty over the direction of government policy or "early signals of
broader labor market deterioration.''
Complicating the picture: The United States doesn't need as many jobs as it
used to keep the unemployment rate stable. Baby boomer retirements and Trump's
immigration crackdown mean fewer people are competing for work. As a result,
economists say, the so-called "break-even'' rate of hiring could be as low as
zero jobs a month, down from perhaps 150,000 a year or so ago.
So far this year, employers have been adding an average 80,000 jobs a month,
more than enough to keep the unemployment rate low, and a big improvement on
the 2025 average of just 9,700 jobs a month -- the feeblest hiring outside a
recession since 2002.
Still, hiring remains well below the 166,000 monthly jobs created, on
average, in 2023 and 2024 and the 491,000 a month recorded during the 2021-2022
hiring boom that followed pandemic lockdowns.
"We are seeing a modest improvement,'' said Glassdoor's Zhao. "Whether
that's enough to really make workers feel good about the job market is a
different question. A modest improvement is not really the same as opening up
opportunities and really making people feel like they can advance their
careers.''
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