American job prospects have taken a sharp downturn! A survey shows that expectations for re-employment within three months for the unemployed have dropped to the lowest in 12 years.

The US job market is rapidly cooling down. According to the latest monthly survey released by the Federal Reserve Bank of New York on Monday, expectations for finding a new job within three months for the unemployed dropped significantly by nearly 6 percentage points in August, reaching the lowest level since the issue was first included in the survey in 2013. This is also the largest monthly decline since the outbreak of the COVID-19 pandemic, indicating a sharp deterioration in confidence in the labor market. As this survey result was released, US employment data continued to be weak. In August, US businesses added only 22,000 net new jobs, far below market expectations. At the same time, revised data showed that businesses actually reduced employment in June, and the national unemployment rate rose to 4.3%, reaching a new high. Analysts point out that the cooling of the job market has become a focus of the market, and the concerns of Federal Reserve officials have shifted from previous inflation risks triggered by tariffs to worries about slowing economic growth and weak job market. Despite the deteriorating employment situation, consumer inflation expectations remain relatively stable. The survey shows that the median expectation for price increases in the next year rose to 3.2% in August, the highest since May, when the US government announced tariffs on major trading partners. Expectations for inflation in the next three years have remained at 3% for the third consecutive month, while expectations for inflation in five years remain at 2.9%. The New York Fed stated that stable inflation expectations indicate that tariffs may only be a one-time price shock, even if its impact may take several months to fully transmit to the economy. The market widely expects that the Federal Reserve will cut interest rates by 25 basis points at the policy meeting on September 16-17 to address the economic weakness. Investors believe that the continued weakness in employment data may push the Federal Reserve to take more aggressive easing measures, and there is a possibility of consecutive rate cuts in the coming months to hedge against downside economic risks. The New York Fed pointed out that the deteriorating job prospects have affected all age groups, education levels, and income groups, with the group with the highest educational attainment being high school graduates being the most affected. At the same time, consumers' perception of their financial situation has also deteriorated significantly. The proportion of people who believe that their current financial situation is worse than last year has increased, the number of people expecting their future financial situation to deteriorate further has increased, expectations for the availability of credit in the future have decreased, and the proportion of people who believe they may not be able to repay the minimum debt repayment amount within the next three months has increased. The survey also shows that consumers generally believe that the possibility of a rise in the unemployment rate in the next year is higher, but their expectations for their own unemployment or voluntary resignation probabilities have not changed much. Economists warn that if the job market continues to weaken, the US economy may face more significant recession risks within the year, which will be a key consideration for future Federal Reserve policy decisions.