There’s a new reason people feel bad about the economy

When the Federal Reserve cut interest rates for the first time in four years last Wednesday, its chairman, Jerome Powell, pointed out the sea change. “As inflation has declined and the labor market has cooled, the upside risks to inflation have diminished and the downside risks to employment have increased,” he said.

While consumers don’t anticipate a recession, they’re still feeling bad about their job prospects. You could chalk some of that up to the roller coaster of the white-collar job market. In 2021, money was free to borrow and firms scrambled to outbid each other, meaning Americans could relatively easily switch jobs and land raises.

But the job market has cooled. Year-over-year employment has gone down in the information sector, which encompasses several parts of the tech industry, as some firms have conducted layoffs and many have slowed hiring.

Job seekers can feel the difference. The Conference Board said the share of consumers saying jobs were plentiful fell to 30.9% from 32.7% in August. Meanwhile, 18.3% of the surveyed consumers said jobs were hard to get, an increase from 16.8% in August. The Wells Fargo economists Shannon Seery Grein and Jeremiah Kohl said in a note on Tuesday that the “persistent drop” in that measure was “a clear sign that the labor market is not nearly as tight as it once was.”

Dana M. Peterson, the Conference Board’s chief economist, said in a statement that that deterioration likely reflected consumers’ “concerns about the labor market and reactions to fewer hours, slower payroll increases, fewer job openings — even if the labor market remains quite healthy, with low unemployment, few layoffs and elevated wages.”

Surveyed consumers also anticipate more gloominess in the months ahead: 13% said they expected their income to decrease in the next six months, higher than the 11.7% who said the same in August.

The consumer-confidence data comes as more Americans are looking for jobs. The Federal Reserve Bank of New York found in its July survey of consumer expectations that the percentage of Americans who had looked for a job over the past four weeks reached its highest level since March 2014.

That survey also suggests Americans have been feeling less confident about their ability to find a job should they lose theirs, with the mean perceived probability of finding a new role tumbling since early 2023.

That makes sense when taking job opportunities into account. Per the latest Job Openings and Labor Turnover Survey, there were 7.7 million job openings in July, a decrease of 1.1 million from the previous year. In July 2023, the information sector had 158,000 jobs open; that number plummeted to 113,000 this July.

It’s not all bad news (and vibes), though. The Fed finally cut rates, which could loosen up hiring — and make it cheaper for consumers to pay off their credit cards or land a lower mortgage rate. And workers’ investments might at least be chugging along as the stock market reaches record highs. Even so, though, it’ll take a little while for new monetary policy to trickle into daily life and the labor market.

“This is a labor market where if you have a job you like, you’re in a pretty good position,” Julia Pollak, the chief economist at ZipRecruiter, previously told BI. “If you don’t have a job, if you’re a new grad, finding a job is actually unusually difficult — especially in the private sector outside of healthcare.”

Are you having trouble finding a job, or is the job market making you feel bad? Contact this reporter at jkaplan@businessinsider.com.