The March survey of consumer expectations by the Federal Reserve Bank of New York reveals that many Americans expect the unemployment rate to rise over the year ahead, along with the prospect of losing their job. More also expect wages to fall.
Paradoxically, job expectations improved during the month, according to the survey conducted by the NY Fed's Center for Microeconomic Data — a nationally representative online survey of 1,300 household heads.
It found median expectations for wage growth in the year ahead slipped by 0.1 percentage point to 2.4% in March, below the low end of the trailing average of its range since May 2021 of 2.4% to 3%. The under-40s were the only age group to see more hope for earnings growth, especially those with a BA or higher.
The likelihood of higher unemployment reached its highest reading since last April, with the average probability of a higher unemployment rate over the coming 12 months climbing by 3.6% to 43.5%. This expectation was held by all age groups and educational levels nationwide.
There was also a 0.6% mean increase to 14.4% in households' perceived probability of losing their job in the year ahead – slightly lower than the 12-month trailing average of 14.6%. The higher expectation of job loss applied to all age groups, all educational levels and both high and low numeracy levels in all parts of the country.
At the same time, the expected quit rate for workers voluntarily leaving their jobs rose by 2.4% points to 18.3%.
This finding may be linked to another that showed Americans had higher hopes of finding a job if their current job were lost. The mean perceived probability in March rose by 1.9 percentage points to 45.9%, though this was lower than the 12-month trailing average of 47.5%. Expectations of finding a job were highest among those with at least a high school or some college education. They fell for those with a B.A. or higher.
This optimism comes despite a Bureau of Labor Statistics report that hiring in February dipped to its lowest level since April 2020 – though this may have been partly due to winter blizzards that struck much of the nation.
On average, 14.6% of respondents expected a probable move in the coming year. The most likely to move were the under-40s (25.8%), followed by those aged 40-59 (13.7%) and those 60 or older (7.4%).
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