Record-Low Worker Confidence Highlights Weakening U.S. Labor Market
The U.S. labor market is showing clear signs of distress as worker confidence in securing new employment has plummeted to its lowest level since 2013. The New York Federal Reserve’s monthly Survey of Consumer Expectations for August revealed that respondents assigned just a 44.9% probability of finding another job if they lost their current one, marking a sharp 5.8 percentage point drop from July.
This historic low underscores a significant shift from the robust job mobility seen during the “Great Resignation” period of 2021-2022, when millions of workers voluntarily left their jobs each month with strong optimism about new opportunities. According to Bureau of Labor Statistics data, monthly quits have fallen to 3.2 million as of July 2025, down more than 5% year-over-year and well below peak levels.
Factors Driving the Decline in Job Mobility
Senior economist Elizabeth Renter of NerdWallet attributes the decline in worker confidence to the current hiring freeze among employers and the general economic uncertainty. “Consumers are feeling down about job-finding opportunities, and those feelings are wholly appropriate,” Renter said. “It’s very difficult to find work right now, and unlikely to get better any time soon. Employers aren’t hiring much, so workers are stuck job-hugging, clinging to their current jobs because the market isn’t favorable to job seekers.”
The labor market dynamics that fueled high mobility during the pandemic—such as a supply-demand imbalance favoring workers—have largely dissipated. Presently, there are more job seekers than open positions, a reversal from the pre-pandemic environment and a sign of the market’s cooling.
Survey Reflects Increased Uncertainty and Weak Hiring
Other indicators from the New York Fed survey reinforce these trends. The likelihood of voluntarily quitting a job over the next year held steady at 18.9%, while expectations that the unemployment rate will rise within 12 months increased to 39.1%, surpassing the recent average. This shift in sentiment follows the Labor Department’s August jobs report, which showed a disappointing gain of just 22,000 new jobs versus an expected 75,000. June’s employment figures were also revised downward to a loss of 13,000 jobs—the first monthly decline since late 2020.
The unemployment rate rose to 4.3%, with a broader measure including discouraged and underemployed workers reaching 8.1%, the highest since October 2021. These data points highlight the growing challenges in the labor market as economic growth concerns and inflation persist.
Implications for Monetary Policy
In response to the labor market’s weakening, financial markets widely anticipate that the Federal Reserve will consider its first interest rate cut since December 2024 at the upcoming September 17 policy meeting. The Fed’s future actions will be closely watched as they balance inflation control with the need to support a faltering jobs market.
FinOracleAI — Market View
The record-low worker confidence and disappointing August jobs data signal a clear cooling in the U.S. labor market. The combination of slower hiring, rising unemployment expectations, and subdued job mobility increases the likelihood of a Federal Reserve interest rate cut in the near term. Investors should monitor upcoming employment reports and Fed communications closely, as further labor market deterioration could intensify recession fears and impact equity valuations.
Impact: negative
