Americans braced for biggest unemployment rate jump since the pandemic as tariffs muddy outlook

Key Points

  • Unemployment expectations among American workers have surged to levels last seen during the early stages of the global health crisis, with fears about the labor market intensifying.
  • The Federal Reserve Bank of New York's survey indicates a significant jump in the mean probability of higher unemployment in the next year, reaching 44% in March, the highest since April 2020.
  • The likelihood of individuals becoming unemployed in the next 12 months has also increased, particularly affecting those with lower incomes.
  • Despite recent positive labor market data, the Federal Reserve and some Wall Street economists predict a weakening labor market in the coming years, with forecasts of rising unemployment rates.

Summary

A recent survey by the Federal Reserve Bank of New York has highlighted growing concerns among American workers about unemployment, with fears reaching levels last seen during the early stages of the global health crisis. The survey revealed that the mean probability of the US unemployment rate being higher in a year's time jumped to 44% in March, marking the highest level since April 2020. This increase in unemployment expectations was particularly pronounced among respondents with lower incomes. Despite the labor market showing resilience with a 4.2% unemployment rate and the addition of 228,000 jobs in March, the Federal Reserve anticipates a softening labor market in the future, projecting an unemployment rate of 4.4% by 2025. Wall Street economists, like Michael Feroli from JPMorgan, are even more pessimistic, forecasting a 5.2% unemployment rate for the same year. Additionally, consumer concerns are not limited to unemployment; inflation expectations have also risen, with potential implications for future price growth due to recent tariff impositions.

yahoo
April 14, 2025
Stocks
Read article

Related news