Americans’ Labor Market Sentiment Declines

By Michael S. Derby

NEW YORK (Reuters) – Americans’ view on labor markets soured in March, as respondents to a Federal Reserve Bank of New York survey sharply trimmed back the pay rate they said would prompt them to take a new job.

The bank reported as part of its Survey of Consumer Expectations that the so-called reservation wage for a new job fell to $74,236 last month, down from a series high of $82,135 in November. The survey indicated that this diminished wage expectation was primarily driven by men and workers over the age of 45.

Worker willingness to accept lower pay comes amidst a noticeable decline in consumer sentiments observed in multiple surveys since the beginning of the Trump administration. Consumers have reported increasing anxiety regarding the economic outlook and near-term inflation as President Donald Trump has initiated a global trade war while simultaneously seeking to reduce federal government operations.

Several economists now believe there is a strong likelihood of a recession looming in the economy, while Federal Reserve officials express expectations of rising inflation and unemployment, alongside markedly slower growth due to the president’s policies.

The New York Fed survey also found respondents reporting decreased satisfaction concerning job pay, benefits, and promotion opportunities, noting that contentment with wage compensation is at its lowest point since November 2021.

In March, households also lowered their expectations compared to November regarding the likelihood of receiving at least one job offer within the next four months. Additionally, respondents reduced their anticipations regarding the necessity of working in their later years.