Americans became ‘more pessimistic’ about the job market in August, while overall confidence rose

Sara Adm3 weeks ago

103 2 minutes read

Americans became ‘more pessimistic’ about the job market in August, while overall confidence rose

Americans are growing wary of the job market amid persistent signs of slowing demand for workers, according to new data released Tuesday by the Conference Board.

Overall, the Conference Board’s latest consumer confidence index showed confidence rising this month, to 103.3 from 101.9 in July, although Conference Board chief economist Dana Peterson noted that consumer sentiment was “mixed” as concerns about the labor market increased.

“Compared to July, (consumers) were more positive about the economic situation, both current and future, but also more concerned about the job market,” Peterson said in a statement.

“Consumers’ assessments of the current labor market situation, while still positive, continued to weaken, and assessments of the future labor market became more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also somewhat less positive about their future income.”

The report also found that consumers had become more wary of the stock market after stocks plunged in early August, with less than half expecting stock prices to rise over the next year.

Inflation expectations were more positive, however, with expectations for price increases in the year ahead falling to their lowest level since March 2020. Confidence was also split along demographic lines, with confidence in August falling for those under 35 and rising for those aged 35 and over.

In August, the Conference Board found that 32.8% of consumers said jobs were “plentiful,” down from 33.4% in July. Meanwhile, 16.4% of consumers said jobs were “hard to find,” up slightly from 16.3% in July.

The report comes as recent economic data shows a slowdown in the labor market.

In July, the unemployment rate hit 4.3%, its highest level in nearly three years, while the U.S. labor market added 114,000 jobs, the second-lowest monthly total since 2020.

This was followed by an upward revision to monthly job creation figures released on August 21. The release showed that the U.S. economy employed 818,000 fewer people than initially reported in March 2024, indicating that the labor market may have cooled well before initially thought.

Meanwhile, data from the Bureau of Labor Statistics showed that the quit rate, seen as a sign of confidence among workers, stood at 2.1% in July, its lowest level since August 2020.

Economists and the Federal Reserve have been paying more attention to signs of weakening in the labor market in recent weeks.

In a speech Friday, Federal Reserve Chairman Jerome Powell said the labor market slowdown was “undeniable” and that downside risks to the central bank’s full employment mandate had increased.

“It appears unlikely that the labor market will become a source of elevated inflationary pressures in the near future,” Powell said. “We do not want or welcome a further slowdown in labor market conditions.”

Economists are therefore watching the August jobs report, due out on September 6, as a key indicator of whether recent signs of weakness in the labor market are worsening.

The U.S. labor market is expected to add 160,000 jobs, up from 114,000 last month, according to forecasts by economists polled by Bloomberg. The unemployment rate is expected to fall to 4.2 percent, down from 4.3 percent the previous month.