Key insights
- A new survey indicates a divergence between perceived personal prosperity and anxiety about job security among Americans. While the overall prosperity index is positive, a significant portion of working Americans fear job loss in the next six months. This reflects a 'low-fire, low-hire' labor market, where companies are hesitant to lay off employees but are also slowing down hiring. Increased job loss worries could signal a weakening consumer and potentially negative impact on equities.
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Americans say they're feeling prosperous, but more than a quarter of working Americans are worried they'll lose their jobs in the next six months, according to research released this week.
A survey of more than 2,500 people, conducted by Ipsos for financial services company Northwestern Mutual, found Americans gave themselves an average score of 68 out of 100 on the new Personal Prosperity Index. Although Americans on the whole reported that they felt "good" on the Prosperity index, many also reported discontent and anxiety.
More than half of respondents said they expect costs to rise and the economy to worsen.
People feel solid about their finances but worry about job loss in what economists call a "low-fire, low-hire" labor market.
"We're seeing a fascinating split screen in America right now. People are looking at the national economy and feeling anxious, but when they look in the mirror, they feel resilient," said Tim Gerend, CEO of Northwestern Mutual, in a press release.
Among working Americans, 26% said they were worried about losing their jobs in the next six months. Among those actively looking for work, the worry was sharper: 78% said they were concerned about finding a job.
Economists have characterized the labor market as "low-fire, low-hire" as many employers hold off on layoffs but are pulling back on new hires, even as Meta, PayPal, and other big employers cut staff. The unemployment rate, which was 4.3% in March, remains low by historical standards.
Data from the Federal Reserve Bank of New York's Survey of Consumer Expectations also show job-loss worries ticked up in March: the average perceived probability of losing one's job in the next 12 months rose to 14.4%, from 13.8% in February.
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