The job market is strong, economists say — but workers don’t think so

cnbc.com:

In this article

The job market remains strong despite gradual cooling from pandemic-era highs, according to labor economists — but workers don't seem to share that outlook.

Employee confidence fell last month to its lowest level since 2016, according to Glassdoor data. About 46% of workers reported a positive six-month outlook for their employers, down from 54% from a year ago.

Meanwhile, the ZipRecruiter Job Seeker Confidence index was down six points in the second quarter to its lowest point since the beginning of 2022.

More from Personal Finance:
Supreme Court case may gut the CFPB
Student loan bills resume for 40 million Americans
Here are the top 10 highest-paying college majors

The juxtaposition of a resilient labor market but deteriorating sentiment is likely due to financial stress among workers and the fact that the recent baseline was a scorching-hot job market in 2021 and 2022, economists said.

«Overall, workers still have more leverage and more job security than before the pandemic,» said Julia Pollak, chief economist at ZipRecruiter.

«I think job seekers comparing this environment to 2021 and 2022 do feel worse off,» she added. «It's taking more effort to find a job, and jobseekers are searching under greater financial strain now.»

For example, inflation has led the Federal Reserve to raise borrowing costs to cool the economy and rein in fast-rising consumer prices. Interest rates — like those for mortgages and credit cards — have spiked for consumers as a result. Savings rates have fallen precipitously. Student loan payments resumed this month.

Several metrics — including job openings, quits, layoffs and the unemployment rate — suggest the labor market is healthy, economists said.

Daniel Zhao, lead