Cracks are beginning to show in the U.S. labor market.
A recent New York Federal Reserve survey, released Monday, reveals a worrying trend: fewer Americans report being employed, more are searching for jobs, and dissatisfaction with pay is mounting.
This thrice-yearly survey, a barometer of labor activity, confidence, and satisfaction, highlights rising concerns about job security.
July saw an uptick in those expecting to work past retirement age—a telltale sign of economic anxiety.
Although workers are holding out for higher starting salaries, the offers on the table are shrinking.
The findings emerge as the unemployment rate edges higher, a development closely monitored by Wall Street and Fed policymakers for clues on the U.S. economy’s direction.
Notably, only 88% of those employed in March were still in their jobs by July—the lowest retention rate since the survey began in 2014.
The proportion of individuals fearing unemployment jumped to 4.4%, marking a historic high.
Meanwhile, job hunting surged, with 28.4% of respondents actively seeking new opportunities—a sharp 9 percentage point increase over the past year.
Wage satisfaction is also on the decline.
Only 56.7% of workers are content with their current paychecks, down over 3 percentage points from the same period in 2024.
Satisfaction with benefits plunged by more than 8 points, and promotion opportunities are dwindling, especially among women, those without a college degree, and households earning less than $60,000 annually.
While the average wage offer for full-time positions dipped slightly to $68,905, the “reservation wage”—the minimum acceptable salary—climbed to $81,147, just shy of the record high from the previous survey.
Another red flag: the likelihood of working past age 62 rose to 48.3%, with 34.2% expecting to continue past 67—both figures inching upwards.
Despite a still-low unemployment rate of 3.5%, its recent rise is stoking fears of deeper economic troubles.
July’s modest gain of 187,000 nonfarm payroll jobs adds to the concern, making the upcoming August report crucial.
After their latest meeting, Fed officials noted that job growth has “moderated.”
As the central bank contemplates a quarter-point rate cut at its September meeting—the first reduction in over four years—the labor market’s fragility will be front and center.
This Fed survey paints a picture of a labor market on shaky ground, where paychecks feel lighter, and the future seems uncertain.
With the business community and economy teetering, all eyes are on the Fed as it navigates these troubled waters.
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