Confidence about the economy is in short supply despite a relatively solid job market

The U.S. job market has remained robust despite a series of economic shocks, including President Trump's trade wars, persistent inflation, high interest rates, and a conflict with Iran that has led to soaring gasoline prices. According to the Labor Department, employers added 90,000 jobs in September, and unemployment remained low at 4.1%.

However, a recent survey by the Conference Board revealed that U.S. consumer confidence has plummeted to its lowest level in over a decade. The reason lies in the respondents' concerns about job availability, with more than 28% expecting fewer jobs in six months, compared to just 14% expecting job growth. Glassdoor's employee confidence index, based on workers' perceptions of their own company's prospects, also hit a record low this month, marking the third consecutive monthly low.

This economic disquiet coincides with the upcoming midterm elections, where Trump's Republican Party's Congressional control is at stake. A recent AP-NORC poll found that only 17% of U.S. adults approve of Trump's handling of the cost of living, while just 26% approve of his overall handling of the economy, marking a new low.

The job market, however, presents an unusual situation. While employers are not laying off many workers, they are also not aggressively hiring. A Labor Department measure of gross hiring has been stagnant for over two years, leading economists to describe the job market as "low-hire, low-fire,' where those who have jobs are mostly secure, but job seekers struggle to find employment.

The average unemployed person has been out of work for more than six months, the longest such period since February 2022. This situation has made layoffs particularly concerning for workers, who fear the financial impact and difficulty in finding new jobs. Fewer workers are willing to leave their current positions due to the challenging job market and limited opportunities for better-paying or more favorable work-life balance roles.

The Federal Reserve Bank of San Francisco noted that the job search has become more difficult for two groups typically benefiting from an economic expansion: young or inexperienced workers and those with college educations. The researchers suspect factors such as Trump's immigration policies, hiring slowdowns in tech and government sectors, and potential AI-related job displacement among professionals as contributing to the sluggish job search.