Americans are right to be worried about the labor market

According to just about every significant economic indicator, including the December jobs numbers released Friday, the U.S. economy is doing fine. Not great, mind you: Job growth stalled in 2025. But unemployment is low, gross domestic product growth is solid, and inflation is seemingly trending downward.

Yet as consumer expectations surveys, political polls and even election results keep making clear, Americans are extremely dissatisfied with how things are going on the economic front. This seeming disconnect between perception and reality has been the subject of much analysis, with partisanship, increasing negativity in both traditional and social media and lingering anger over the inflation wave of 2021 and 2022 probably the most frequently mentioned explanations.

I’ve got a new one to offer, on the basis of responses people have been giving to consumer-survey questions about employment: Americans are really worried about the job market of the near future. They’re not especially worried about losing their jobs right now but are pessimistic about their prospects of finding new work if they do and are downright alarmed about the outlook for several years down the road. Concern about the impact of generative artificial intelligence seems as if it’s probably a key driver of all this, although the current strange state of the job market is clearly a factor, too.

Respondents to the Conference Board Consumer Confidence Survey, for example, are a bit more likely than they were a year ago to report that jobs are hard to get. But the 20.8% who thought so in December was still lower than at all but a few brief periods over the survey’s 59-year history. The 27.4% who thought jobs would be scarcer in six months, on the other hand, was a level seldom seen outside of recessions.

The questions are different in the Federal Reserve Bank of New York’s Survey of Consumer Expectations, but the message is similar. Respondents’ assessments of the probability that they will lose their job have been creeping upward but are still lower than before the pandemic. Their average assessment of the probability of finding another job if they lose their current one, on the other hand, is the lowest it’s been in the 12-year history of the survey.

This seems to be an entirely accurate assessment of the current labor market. According to the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, the layoff rate remains quite low by historical standards, but the hiring rate is lower than at any time in the 25-year history of the survey except during the Great Recession and its aftermath. Random people in a consumer expectations survey are capable of quite accurately describing the world around them.

Are they capable of accurately predicting what that world will look like in five years? Historically, no. The average probability of losing one’s job in the next five years in the University of Michigan Surveys of Consumers has tended to peak right around when employment bottoms out and starts to improve. (In the early 2000s, employment kept falling for almost two years after the recession was deemed to have ended.)

This time around, though, the rise in gloominess is coming after several years of good times for workers, meaning it must be driven largely by forward-looking angst. Survey after survey after survey has found widespread belief that generative AI will displace many workers, so that has to be one big reason. One interesting development in the University of Michigan consumer surveys is that it is now those with college degrees who are most worried about losing their jobs — something that’s only happened on a sustained basis once before, during the post-dot-com-bubble tech implosion of the early 2000s. (The New York Fed surveys show a similar recent breakdown by education level.)

Again, the record of this particular survey question in predicting the future is quite weak. AI could well end up creating more jobs than it destroys. But the current signals being sent by the job market — which has already turned distinctly unfriendly to recent college graduates, especially in the most AI-exposed occupations — and the things that some tech industry leaders are saying about AI’s job-destroying potential would certainly lead a reasonable person to worry.

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of "The Myth of the Rational Market."