Americans are growing wary of the job market amid continued signs labor demand is cooling, according to new data released from the Conference Board on Tuesday.
Overall, the latest consumer confidence index reading from the Conference Board showed an uptick in confidence this month, to 103.3 from 101.9 in July, though Conference Board chief economist Dana Peterson noted consumer feelings were “mixed” as labor market worries increased.
“Compared to July, [consumers] were more positive about business conditions, both current and future, but also more concerned about the labor market,” Peterson said in a release.
“Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.”
The report also found consumers grew more wary of the stock market after the early August sell-off, with less than half of consumers expecting stock prices to rise in the next year.
Inflation expectations, however, were more positive, with year-ahead expectations for price increases falling to the lowest level since March 2020. Confidence was also divided along demographic lines, with confidence in August falling for those under 35 and rising for those 35 and older.
In August, the Conference Board found 32.8% of consumers said jobs were “plentiful,” down from 33.4% in July. Meanwhile, 16.4% of consumers said jobs were “hard to get,” slightly up from 16.3.
The report comes as recent economic data has shown softening in the labor market.
In July, the unemployment rate hit 4.3%, its highest level in nearly three years, while the US labor market added 114,000 jobs, the second-lowest monthly total since 2020.
This was followed by an up revision to monthly employment additions released on Aug. 21. The release showed the US economy employed 818,000 fewer people than originally reported as of March 2024, indicating the labor market may have been cooling long before initially thought.
Meanwhile, data from the Bureau of Labor Statistics showed the quits rate, considered a sign of confidence among workers, sat at 2.1% in July, its lowest level since August 2020.
Economists and the Federal Reserve have been more attentive to signs of weakening in the labor market over the past several weeks.
In a speech last Friday, Federal Reserve Chair Jerome Powell said the cooling in the labor market has been “unmistakeable” and that the downside risks to the central bank’s mandate for full employment have risen.
“It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon,” Powell said. “We do not seek or welcome further cooling in labor market conditions.”
Economists are therefore eyeing the August jobs report, due out on Sept. 6, as a key indicator of whether recent signs of labor market weakness are worsening.
As of Tuesday, economists surveyed by Bloomberg are predicting the US labor market added 160,000 jobs, an increase from last month’s 114,000. Meanwhile, the unemployment rate is expected to decline to 4.2% from the 4.3% seen the month prior.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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