Fed Survey: Americans see declining employment, increasing job search concerns, and dissatisfaction with wages

A survey released by the New York Fed on Monday shows new signs of cracks in the US labor market.

According to this latest survey, the number of people reporting employment has decreased, while the number of job seekers has surged, and dissatisfaction with compensation is growing. Concerns about job security in July have intensified, with an expected increase in the number of people working beyond the usual retirement age, still seeking higher starting salaries but receiving lower job offers.

Key findings of this survey include many indicators reflecting a deteriorating trend in the labor market:

• Among those employed in the March survey, 88% are still working, the lowest proportion since 2014.
• The expected number of people facing unemployment has risen to 4.4%, an increase of 0.5 percentage points from a year ago, marking the highest proportion in the history of the survey.
• The proportion of people actively looking for new jobs in the past four weeks has surged to 28.4%, a significant increase of 9 percentage points from a year ago, also hitting a historical high since March 2014.
• Regarding wages, the proportion of respondents satisfied with their current compensation has dropped to 56.7%, a decrease of over 3 percentage points from the same period in 2023. The proportion of respondents satisfied with benefits has decreased to 56.3%, a drop of over 8 percentage points from last year.
• The proportion of respondents satisfied with promotion opportunities has decreased to 44.2%, lower than last year's 53.5%. This decline is most pronounced among women, those without a college degree, and respondents with a household income below $60,000.
• In the past four months, the typical wage offer for full-time work has slightly decreased to $68,905. The average "reservation wage," the minimum wage level workers are willing to accept for new jobs, has risen to $81,147, an increase of about $2,500 from a year ago, slightly lower than the previous survey, which set a historical high at that time.
• 48.3% of respondents expect to continue working after the age of 62, an increase in this proportion. 34.2% of respondents expect to continue working after the age of 67, an increase of over 2 percentage points.

The above-mentioned survey by the Federal Reserve is conducted three times a year to measure labor market activity, confidence, and satisfaction.

The New York Fed's related survey comes at a time when the US labor market is showing clear signs of weakness. The July non-farm payroll report released earlier this month showed a significant shortfall in non-farm employment of 114,000, with the unemployment rate rising to 4.3%, reaching a nearly three-year high. While a 4.3% unemployment rate is still considered low by historical standards, the recent continuous increase has raised concerns about broader weakness in the US economy.

Currently, Wall Street and Federal Reserve policymakers are closely monitoring the latest developments in the labor market to find clues about the future direction of the US economy. This week, the 2024 Global Central Bank Annual Meeting is approaching, with market expectations that Fed Chair Powell's speech will focus on maintaining labor market stability. Analysts believe that if Powell takes a more resolute stance on preventing labor market weakness, it will be seen as an important policy signal