Workers are sour on the job market — but it may not be warranted

on Jan29
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Workers are sour on the job market — but that pessimism may be somewhat misplaced.

The Glassdoor Employee Confidence Index in January fell to its lowest level since 2016, when the career site began tracking the metric, it said Monday. The index measures how workers feel about their employer’s six-month business outlook.

The decline suggests job security is a “prominent” worry, said Daniel Zhao, lead economist at Glassdoor. “It’s a signal that employees are concerned heading into 2024,” he said.

Layoff headlines mask ‘very robust’ job market

However, those recent headlines mask strength in the overall job market, economists said.

From a worker’s perspective, things “don’t get any better,” said Mark Zandi, chief economist at Moody’s Analytics.

Despite pockets of layoffs in certain industries such as tech, Zandi said job cuts across the broad U.S. labor market continue to hover near historic lows, where they’ve been since spring 2021.

New claims for unemployment insurance are in line with their pre-pandemic trend in 2019, which economists describe as a period of labor market strength. The unemployment rate has also been below 4% for two years.

Indeed, when it comes to the average annual unemployment rate, 2023 was the sixth-best year on record, ranking only behind a few years in the 1950s and 1960s, said Julia Pollak, chief economist at ZipRecruiter.

“It’s still a very robust and resilient labor market overall,” Pollak said.

Outlook depends on your reference point

The one ‘blemish’ in the U.S. economy

High pandemic-era inflation eroded buying power for the average person in consecutive months for more than two years. While wage growth was historically high, workers’ paychecks bought less.

But that trend has reversed: Wage growth now surpasses the rate of inflation for the average person, meaning workers’ paychecks are growing again relative to the things they buy. If that trend holds, consumer confidence should gradually rebound, Zandi said.

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