The employment outlook in the United States has taken a sharp turn for the worse! A survey shows that the re-employment expectations of unemployed individuals have dropped to the lowest level in twelve years

The U.S. job market is rapidly cooling down.

According to the latest monthly survey released by the Federal Reserve Bank of New York on Monday, the expectation for unemployed individuals to find new jobs within three months has significantly dropped by nearly 6 percentage points in August, reaching the lowest level since this question was first included in the survey in 2013. This also marks the largest single-month decline since the outbreak of the COVID-19 pandemic, indicating a sharp deterioration in confidence in the labor market.

This survey result comes at a time when U.S. employment data continues to be weak. In August, U.S. companies added only 22,000 net new jobs, far below market expectations. Meanwhile, revised data shows that companies actually reduced jobs in June, with the national unemployment rate rising to 4.3%, hitting a new high. Analysts point out that the cooling of the job market has become a focal point for the market, and concerns among Federal Reserve officials have shifted from inflation risks caused by tariffs to worries about slowing economic growth and weak employment.

Despite the worsening employment situation, consumer inflation expectations remain relatively stable. The survey shows that the median expectation for price increases over the next year rose to 3.2% in August, the highest since May, when the U.S. government had just announced tariffs on major trading partners. Inflation expectations for the next three years have remained unchanged at 3% for the third consecutive month, while five-year inflation expectations remain at 2.9%. The New York Fed stated that stable inflation expectations suggest that tariffs may only represent a one-time price shock, even if their effects take months to fully transmit to the economic system.

The market currently widely expects that the Federal Reserve will cut interest rates by 25 basis points at its policy meeting on September 16-17 to address economic weakness. Investors believe that the continued weakening of employment data may prompt the Federal Reserve to adopt more aggressive easing policies, with the possibility of consecutive rate cuts in the coming months to hedge against economic downturn risks.

The New York Fed pointed out that the deterioration in employment prospects spans all age groups, education levels, and income brackets, with the most affected being those with a high school diploma as their highest level of education. Meanwhile, consumers' perceptions of their financial situation have also significantly worsened. The proportion of those who believe their current financial situation is worse than last year has increased, the number of people expecting their financial situation to further deteriorate has risen, expectations for future credit availability have declined, and the proportion of those who believe they may not be able to make minimum debt repayments in the next three months has increased.

The survey also shows that consumers generally believe that the likelihood of unemployment rising in the next year is higher, but their expectations regarding their own probability of unemployment or voluntary resignation have not changed much. Economists warn that if the job market continues to weaken, the U.S. economy may face more significant recession risks within the year, which will become a key consideration for the Federal Reserve's future policy-making