Americans Feeling More Secure in Their Jobs, New York Fed Finds

Sophia Reyes · June 9, 2025 2:46 PM

Americans are showing growing confidence in the labor market, even amid broader economic uncertainties tied to trade policy, interest rates, and other macroeconomic factors, according to the New York Fed’s May 2025 Survey of Consumer Expectations.

One key indicator of this sentiment: the perceived probability that the U.S. unemployment rate will rise in the next year dropped 3.3 percentage points to 40.8%. While still above the 12-month average of 37.7%, it marks a meaningful shift in sentiment as the labor market remains largely stable.

Workers are also feeling more secure in their own positions. The likelihood of losing a job within the next 12 months fell to 14.8%, the lowest level since early 2025. Meanwhile, the expected quit rate—the probability of voluntarily leaving a job—edged up to 18.3%, reflecting increased worker confidence.

This improved labor outlook coincides with cooling inflation expectations. Across short-, medium-, and long-term horizons, inflation expectations declined. One-year-ahead inflation expectations dropped 0.4 percentage points to 3.2%, while three- and five-year expectations slipped to 3.0% and 2.6%, respectively. Uncertainty around these expectations also eased at the one-year horizon.

Other notable findings from the May survey include:

Labor Market

• Earnings Growth: Median one-year-ahead earnings growth expectations rose slightly to 2.7%, still just under the 12-month average of 2.8%.

• Unemployment Outlook: The mean probability that unemployment will rise fell to 40.8%, down 3.3 points month over month.

• Job Loss: The perceived risk of job loss declined to 14.8%.

• Job Search Confidence: The chance of finding a new job within three months after losing one’s current job increased to 50.7%, though it remains below the 12-month average of 52.2%. The boost was driven mainly by individuals without a college degree and those earning less than $100,000.

Inflation & Commodities

• Home Prices: Expected home price growth dipped to 3.0%, with declines concentrated in the West and South.

• Commodity Prices: Expectations for price increases over the next year declined across several categories: gas (2.7%, down 0.8 pts), medical care (7.4%, down 1.3 pts), college education (7.5%, down 1.6 pts), and rent (8.4%, down 0.6 pts). Food prices, however, are expected to rise 5.5%, the highest since October 2023.

Household Finances

• Income & Spending: Expected household income growth inched up to 2.7%, while spending expectations eased to 5.0%.

• Credit Access: Perceptions of current credit access improved slightly, though fewer respondents expect easier credit in the year ahead.

• Debt Delinquencies: The likelihood of missing a minimum debt payment fell to 13.4%, the lowest since January 2025.

• Taxes & Government Debt: Expected tax changes were flat at 3.3%, while projected government debt growth rose to 5.4%.

• Savings Interest: The perceived chance that interest rates on savings accounts will rise dropped to 25.4%.

• Financial Well-being: More respondents reported being better off financially than a year ago and expected their situation to improve over the next 12 months.

• Stock Market Outlook: The probability that U.S. stock prices will be higher in a year rose modestly to 36.3%, still below the 12-month average of 38.7%.

Overall, the May survey signals a cautiously optimistic turn in consumer sentiment—particularly in employment and inflation—though some wariness remains in broader economic expectations.