NY Fed Survey: Job-Finding Expectations Hit Record Low as Consumer Anxiety Rises

A troubling undercurrent is emerging beneath the surface of America's seemingly robust labor market. The Federal Reserve Bank of New York's December Survey of Consumer Expectations, released Thursday, shows that the perceived probability of finding a job has fallen to just 43.1%—the lowest reading in the survey's 13-year history—even as official unemployment remains near historic lows.

The divergence between hard economic data and consumer sentiment presents a puzzle for policymakers and investors alike. If Americans feel increasingly pessimistic about their job prospects despite a healthy labor market, it could signal either mounting anxiety about the future or fundamental changes in how workers perceive their opportunities.

A Record Low in Job Confidence

The headline finding is stark: consumers believe they have less than a coin-flip chance of finding a job if they needed one. This marks the second time in six months that job-finding expectations have hit a series low, suggesting a sustained deterioration in confidence rather than a one-off reading.

The decline cuts across demographics, affecting workers of all ages and education levels. However, the pessimism is most pronounced among:

• Workers over age 60: Concerns about age discrimination and skills obsolescence
• Those without college degrees: Limited access to knowledge-economy jobs
• Households earning under $50,000: Fewer financial buffers if job loss occurs

"The gap between official labor market statistics and consumer perceptions suggests something deeper is at work. Even in a tight labor market, many Americans feel their job security is more fragile than the headline numbers suggest."

— New York Fed research commentary

Job loss expectations also worsened in the December survey, rising to their highest level since mid-2024. Combined with declining job-finding confidence, the data paints a picture of workers who feel both more vulnerable to layoffs and less confident they could recover quickly.

Delinquency Fears Hit Pandemic Highs

Perhaps even more concerning than the job market findings is the sharp rise in expected delinquencies. The perceived probability of missing a minimum debt payment in the next three months rose to 15.3%—the highest reading since April 2020, when the economy was reeling from pandemic shutdowns.

The increase was most pronounced among vulnerable populations:

• Individuals over 60: Fixed incomes struggling with persistent inflation
• Those without college degrees: Wage growth lagging inflation
• Households under $50,000: Limited savings and higher debt burdens

This finding carries implications beyond consumer welfare. Rising delinquencies could pressure bank earnings, particularly for regional lenders with significant consumer exposure. Credit card companies, which have already seen charge-off rates climb throughout 2025, may face additional headwinds.

Inflation Expectations Tick Higher

On the inflation front, one-year-ahead expectations rose 0.2 percentage points to 3.4% in December. Medium- and longer-term expectations remained unchanged, suggesting consumers view the near-term price environment as more uncertain than the longer-term outlook.

The uptick in short-term inflation expectations likely reflects concerns about tariff effects on consumer prices. With the Trump administration maintaining its aggressive trade posture, consumers may be bracing for higher costs on imported goods in the months ahead.

Key survey findings on inflation:

• One-year inflation expectations: 3.4% (up 0.2 percentage points)
• Three-year inflation expectations: 2.9% (unchanged)
• Five-year inflation expectations: 2.8% (unchanged)

The Sentiment-Reality Gap

How do we reconcile dismal consumer sentiment with a labor market that, by most measures, remains healthy? Several factors may explain the disconnect:

1. Quality vs. Quantity: While jobs are plentiful, many workers may feel the available positions don't match their skills, experience, or compensation expectations. The rise of gig work and contract positions may contribute to feelings of precarity even when unemployment is low.

2. Cost of Living Pressures: Even with wage gains, persistent inflation has eroded purchasing power. Workers may feel they're running in place financially, contributing to anxiety about their economic security.

3. AI and Automation Concerns: Growing awareness of artificial intelligence's potential to disrupt labor markets may be influencing how workers perceive their long-term prospects, regardless of current conditions.

4. Media and Social Narratives: Constant coverage of layoffs at high-profile companies can shape perceptions even if aggregate job losses remain modest by historical standards.

Implications for Fed Policy

The consumer survey results arrive just one day before the December employment report, creating an interesting counterpoint to the official data. If Friday's jobs numbers confirm continued labor market strength, the Fed will face a dilemma: should it respond to hard data showing a healthy job market, or to soft data suggesting consumer confidence is fragile?

Historically, the Fed has prioritized hard data over sentiment surveys. However, consumer expectations can become self-fulfilling if pessimism leads households to reduce spending, ultimately weakening the economy they fear.

For now, markets are pricing in just two Fed rate cuts for 2026, with officials signaling patience as they monitor inflation. The consumer survey results are unlikely to change that calculus immediately but may factor into discussions about the appropriate pace of future easing.

What This Means for Your Finances

The survey results, while concerning, shouldn't prompt panic. However, they do reinforce the importance of financial preparedness in an uncertain environment:

• Emergency savings: Aim for 3-6 months of expenses in easily accessible accounts
• Debt management: Prioritize paying down high-interest credit card balances
• Skills development: Invest in training that enhances your marketability
• Network cultivation: Maintain professional relationships that could help in a job search

The gap between consumer anxiety and labor market reality may narrow in either direction. Either confidence will recover as workers recognize the market's underlying strength, or economic conditions will deteriorate to match pessimistic expectations. Either way, financial resilience provides the best defense against uncertainty.