Americans last month grew more worried about the labor market outlook, according to a survey released on Monday by the Federal Reserve Bank of New York.
The bank’s October Survey of Consumer Expectations found that projections the jobless rate will be higher a year from now were at the highest since April 2020, a reading hit during the tumultuous early stages of the COVID-19 pandemic.
Survey respondents also said that in October they saw a greater chance of involuntarily losing a job, although that expectation was still at relatively low levels. But they also said their chance of finding new work after a job loss was higher in October.
The negative bent on the outlook for the job market came in a release that found respondents expecting future price gains to be steady at levels that are nevertheless well above the Federal Reserve’s 2% inflation target.
Respondents see inflation a year from now at 3.9%, three years from now at 3.3% and five years from now at 3%, all levels that matched the September survey. Expectations across a range of commodities were mixed, with households seeing a more moderate increase in gasoline prices a year from now than they saw in September.
On Friday, the government reported that the job market showed unexpected strength in October, with a 165,000 gain and a jobless rate ebbing to 4.1%, amid strong upward revisions to recent hiring data. Fed officials have regularly referred to the job market as low-hire, low-fire.
The survey found that households’ view on their current financial situations improved a bit relative to September while expectations over finances a year from now were steady in October. October’s reading on access to credit now and in the future were unchanged.
The New York Fed report was conducted over the course of October as Americans were in the run-up to pivotal midterm elections that ultimately led to broad-based Democratic gains, including control of both houses of Congress.
Voters went to the polls amid other surveys that have shown a sour mood across the nation, as Americans have struggled with the high inflation unleashed by President Donald Trump’s trade tariffs and Middle East war.
The New York Fed report is most closely watched for its readings on the outlook for inflation. Fed officials are broadly expected to raise interest rates at the early December policy meeting as they work to bring current levels of inflation back to target.
(Reporting by Michael S. Derby; Editing by Andrea Ricci)
