Job Hunting Hits 10-year High Amid Worker Dissatisfaction: NY Fed Survey

People wait in line to enter the Nassau County Mega Job Fair at Nassau Veterans Memorial Coliseum in Uniondale, New York, on Oct. 7, 2014. Shannon Stapleton/Reuters

A survey conducted by the New York Fed shows that more than a quarter of respondents were searching for jobs in July, the highest level in a decade, with a significant proportion of workers reporting a decline in job satisfaction.

The proportion of respondents in the SCE Labor Market Survey who reported searching for a job in July increased to 28.4 percent—the highest level since March 2014—from 19.4 percent in July 2023, the New York Fed said in an Aug. 19 statement.

“The increase was most pronounced among respondents older than age 45, those without a college degree, and those with an annual household income less than $60,000,” it stated.

Employee satisfaction with current wage compensation, non-wage benefits, and promotion opportunities at the respondents’ current jobs dropped by 3.2, 8.6, and 9.3 percentage points since July 2023, declining to 56.7 percent, 56.3 percent, and 44.2 percent, respectively, the survey found.

“These declines were largest for women, respondents without a college degree, and those with annual household incomes less than $60,000,” the report stated.

The average expected likelihood of becoming unemployed over the next four months was also the highest in a decade, according to the survey.

The increase in job seekers comes amid a rise in the unemployment rate. In July, the rate of unemployment increased to 4.3 percent, up from 4.1 percent a month ago, and 3.5 percent a year ago.

The spike in unemployment rate also pushed up the Sahm rule indicator, a measure of potential recession, to a value of 0.53 for July. Any value higher than 0.5 is seen as a signal for a recession.

Unemployment could worsen in the coming months, according to a social media post by market analysis service The Kobeissi Letter.

“If a mild recession hits, history says we could see the unemployment rate rise to over 6 [percent] by the end of 2025,” the post reads. “The unemployment rate has already crossed above its 36-month moving average for the first time in 4 years. Every time this has occurred in the past, a spike in the jobless rate followed.”

Meanwhile, the average expected likelihood of receiving at least one job offer over the next four months increased to 22.8 percent in July, according to the SCE survey. People’s expectations of receiving multiple job offers during this period also increased.

Interest Rates, Unemployment

The SCE survey comes ahead of the Jackson Hole Economic Policy Symposium scheduled to take place this week. Several central bankers, policymakers, academics, and economists from around the world are expected to take part in the event.

“Based on NY Fed SCE labor data for July I expect Fed at Jackson Hole to tee up 25bp cut with room for more if August labor market data comes in anywhere as bad as July,” Don Johnson, chief economist at market research firm Macro Edge, said in an Aug. 20 post on social media platform X.

In July, the Fed said that it doesn’t seem “appropriate” to reduce the interest rate until there is greater confidence that inflation is moving toward the agency’s 2 percent target.

The agency said it is “prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment” of the Federal Open Market Committee goals.

“The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” it said.

For the upcoming Fed meeting in September, most interest rate traders expect a rate cut, with a majority foreseeing at least a 25-point reduction, according to data from the CME FedWatch tool.

The Federal Reserve Bank of Philadelphia’s Q3 2024 survey of professional forecasters found that the outlook on the American economy is “more mixed than three months ago.”

The 36 forecasters in the survey revised their current-year growth expectations upward but said they expect to see higher unemployment rates in the country.