Worker confidence falls to record low as US hiring slows and layoffs surge
New York Fed survey finds workers see a 45% chance of finding new jobs; August payrolls weak, benchmark revisions and rising cuts heighten expectations of a Federal Reserve rate cut.
American workers reported a record-low belief in their ability to find new employment if laid off, underscoring growing fragility in the U.S. labor market as hiring slows and layoffs accelerate.
A New York Federal Reserve survey in August found workers believe there is just a 45 percent likelihood of finding another job if they become unemployed, the lowest reading in the survey's history and an almost 6 percentage-point drop from July. Economists said the decline tracks with other signs of a cooling labor market.
Revised government data released this month deepened concerns. Preliminary benchmark revisions indicate that the number of jobs added to the economy for the year through March could be 911,000 fewer than previously reported — roughly 76,000 fewer per month. The official August jobs report showed the economy added just 22,000 positions, well below Wall Street forecasts near 75,000, and June's figures were revised to a net loss of 13,000 jobs.
The decline in worker confidence represents a marked shift from 2021, when roughly 4.5 million workers a month quit their jobs amid strong prospects for reemployment. By July of this year, quits had fallen to about 3.2 million, a further 5 percent drop from the same period a year earlier, according to the Bureau of Labor Statistics.
"Consumers are feeling down about job-finding opportunities, and those feelings are wholly appropriate," said Elizabeth Renter, a senior economist at NerdWallet. "It's very difficult to find work right now and unlikely to get better any time soon." Renter added that employers are not hiring aggressively, leaving many workers "job-hugging, clinging to their current jobs because the market isn't favorable to job seekers."
Layoff announcements have surged. Career advisory firm Challenger, Gray & Christmas reported a 140 percent increase in announced layoffs compared with a year earlier, and companies have disclosed more than 800,000 job cuts so far this year — the largest annual toll since the pandemic disrupted the economy in 2020. The technology sector has been the hardest hit, with 89,251 positions eliminated in the first seven months of the year, the firm found.
Corporate leaders and analysts have pointed to automation, digitization and the rapid adoption of artificial intelligence as drivers of job reductions. Amazon CEO Andy Jassy told employees the company expects generative AI and software agents to change how work is done and to render some roles redundant. Intel has announced plans to cut 25,000 positions in 2025, the company's second major reduction in two years. Ford Motor Co. CEO Jim Farley said in July that artificial intelligence could replace a large share of white-collar jobs.
Some firms have described cuts as restructuring, with explanations that include automation and broader strategic shifts. Challenger, Gray & Christmas analysts attributed much of the year's job losses to the march of AI and the downstream effects of tariff policies enacted under the prior administration.
The weakening labor-market picture has influenced financial markets' expectations for U.S. monetary policy. Federal Reserve Chair Jerome Powell has signaled that an interest-rate reduction is forthcoming, and economists said the softer jobs data makes a cut more likely at the Federal Open Market Committee meeting scheduled later this month. "The weakening picture of the labor market painted by the August jobs data along with other recent labor market statistics all but ensure a rate cut at the FOMC meeting later this month," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
Analysts and policymakers say the combination of lower worker confidence, downward revisions to employment gains, weak monthly payroll growth and rising layoffs complicates the outlook for household spending and broader economic momentum. Employers that continue to pare workforces cite technology-driven efficiency gains and shifting demand patterns, while workers face greater uncertainty about mobility and wage growth.
For now, the data point to an economy in transition: hiring has slowed markedly from pandemic-era peaks, the composition of job gains has shifted, and firms are increasingly reshaping payrolls in response to technology and strategic priorities. How quickly those trends stabilize will shape labor-market dynamics and the Federal Reserve's policy choices in the months ahead.