Labor & Employment Law Daily Wrap Up, ECONOMIC NEWS—New York Fed survey points to weakening labor market expectations and rising job insecurity, (Jun 9, 2026)

By Patricia K. Ruiz, J.D.

May 2026 data show higher layoff risk, reduced job-finding confidence, and declining household outlook.

The Federal Reserve Bank of New York in its Survey of Consumer Expectations reported that labor market expectations weakened in May 2026, with households expressing increased concern about job security and reduced confidence in reemployment prospects. The report shows rising perceived risks of job loss, declining job-finding expectations, and broader deterioration in household financial outlooks tied to employment conditions. The report also indicates that while earnings growth expectations held steady, other labor-related indicators point to growing strain across income groups.

The Survey of Consumer Expectations is a nationally representative, internet-based panel of approximately 1,300 household heads and tracks changes in consumer expectations related to labor market conditions, earnings, and financial well-being over time.

Job stability. The survey found that the mean perceived probability of losing one’s job within the next 12 months rose by 0.5 percentage point to 15.1 percent, placing it above its 12-month trailing average. At the same time, the likelihood of finding a new job after job loss declined by 2.3 percentage points to 43.7 percent, marking the lowest reading since December 2025 and reflecting declining confidence in labor market mobility.

In contrast, the expected quit rate increased by 2.6 percentage points to 20.8 percent, reaching its highest level since February 2023. The increase was described as broad-based across demographic categories, including age, education, and income groups, suggesting a divergence between voluntary job separation expectations and perceived hiring conditions.

Labor market sentiment. Broader indicators of labor market sentiment were mixed but generally weakened. The mean probability that the U.S. unemployment rate will be higher one year from now edged down to 43.2 percent, though it remained above its 12-month average, indicating continued concern about macro-level employment conditions.

Despite these shifts, median one-year-ahead earnings growth expectations remained unchanged at 2.7 percent, slightly above the 12-month trailing average. Similarly, median expected household income growth held steady at 2.8 percent, suggesting that while wage expectations have not yet declined, they are not offsetting broader concerns about job stability and employment prospects.

Household financial stress. The report links weakening labor market expectations to broader household financial stress. Respondents reported deterioration in both current and expected financial situations, with the share anticipating improved financial conditions declining to its lowest level since October 2022.

Employment-related pressures also appear to be contributing to increased financial vulnerability. The average perceived probability of missing a minimum debt payment over the next three months rose to 12.6 percent, with the increase concentrated among lower-income and less-educated households—groups that may be more sensitive to labor market disruptions.

Credit access. Expectations for future credit access also deteriorated, with fewer respondents anticipating improved borrowing conditions in the coming year. This shift, combined with higher perceived job loss risk and reduced job-finding confidence, underscores a broader decline in household economic security tied to employment outlooks.

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