- Americans waiting to return to work expect the job hunt to stay easy, according to a New York Fed survey.
- The average perceived chance of losing one’s job fell to 12.6% in May, the lowest level since 2013.
- The perceived chance of finding a job soared the most on record, to its highest point since February 2020.
- See more stories on Insider’s business page.
On one end of the labor market, millions of Americans are still jobless. And, whether it’s because of enhanced unemployment benefits, COVID-19 fears, or childcare costs, they aren’t in a rush to find work.
On the other, employers are waiting for workers with open arms. Data suggests it’s the easiest time to find a job since the economy peaked in early 2020.
The US sits squarely in an unusual labor shortage. Job openings sat at a record-high 9.3 million by the end of April, yet quits also hit a record and payroll growth has landed below expectations for two months straight. Businesses are rushing to rehire as the economy opens up. But Americans aren’t hearing the call.
A new report from the
Bank of New York suggests that, at least for the next year, Americans expect their labor to stay in high demand. The mean perceived probability of losing one’s job fell to 12.6% in May, according to survey data published Monday. That’s the lowest level since data collection began in 2013, and the drop was larger for low-income Americans and those with no more than a high school diploma.
Respondents were also more optimistic that they could find work if they lost their current job. The mean perceived probability of finding a job rose to 54% in May from 49.8%, marking the largest month-over-month jump on record. The share is also the highest since February 2020, signaling Americans are the most confident in their ability to find work since the pandemic first rocked the US.
More broadly, just 31.9% of those surveyed said they expect the unemployment rate to be higher in 12 months. That’s the lowest reading on record. Taken together, the survey shows Americans in little rush to rejoin the workforce.
The incentive? Decades-high wage growth
Workers’ patience is literally paying off. Average hourly earnings have boomed through the spring as businesses raise wages to attract workers. Barring an unusual spike at the start of the pandemic, two-month wage growth hit its fastest pace since 1983 in May.
Accelerating wage growth has given Democrats something to focus on amid less-than-stellar payroll growth. President Joe Biden cheered the gains in a May speech, saying competition over employees “doesn’t just give workers more ability to earn a higher wage,” but “dignity and respect in the workplace.”
Separately, Federal Reserve Chair Jerome Powell said that such an uptrend would signal a “really tight labor market.” The Fed has indicated it will let inflation run hot for some time to encourage maximum employment and a healthy pick-up in wage growth.
And, like with easy employment, Americans expect the gains to continue. Median one-year earnings growth expectations rose 0.4% in May to 2.5%, according to the New York Fed. The increase brings expectations close to pre-pandemic levels. The bulk of the gains were driven by respondents with no more than a high school degree, suggesting the service-industry workers staying on the sidelines are optimistic that earnings will grow faster.