Consumers are anticipating a weaker job market. Why does it matter?
Consumers are anticipating a weaker job market. Why does it matter?
Consumer confidence data for March gives us a look at how people are thinking about the labor market. Views of current conditions didn’t move much between February and March. But when The Conference Board, the nonprofit think tank that puts out the survey, asked people about their job prospects six months down the road, that’s when they started to get anxious.
If you look at the hard jobs data, you’ll see steady hiring and relatively low unemployment. But if you ask regular people, its a different sentiment.
“Consumers are not particularly excited about the state of the labor market,” said Yelena Shulyatyeva, an economist with The Conference Board. She said this is the fourth month in a row of eroding confidence, with 28% of survey respondents now expecting fewer jobs to be available in six months.
Economist Allison Shrivastava with the hiring site Indeed said workers have plenty to be anxious about “any time there is uncertainty among policies.”
And even President Donald Trump has said his policies are causing a “period of transition” in the economy.
“It’s going to make people feel as though they don’t have a good hold on what the future brings,” said Shrivastava.
But the truth is, nobody really knows where the labor market is heading. Not the experts, and certainly not everyday consumers.
So why do we bother asking them?
“There’s one strand of thinking that says that actually you should kind of ignore this” and wait for signs of actual softening, said Preston Mui with the research group Employ America.
If workers are feeling insecure about their job prospects, “people are probably going to be less willing to ask for raises from their current employer,” said Mui. “When they go look for jobs, they’re probably willing to take worse jobs than they otherwise would.”
And in that way our expectations of the job market can start to shape reality.
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