Americans' Fears of Rising Unemployment Hit Highest Level Since 2020, New York Fed Survey Shows

American consumers are growing more anxious about the job market even as hiring data surprise to the upside. The Federal Reserve Bank of New York's Survey of Consumer Expectations for October, released on November 9, found that the average perceived probability of a higher U.S. unemployment rate a year from now rose to 45.3%, the highest reading since April 2020, during the early, chaotic months of the COVID-19 pandemic.

Inflation expectations, meanwhile, did not budge, leaving households expecting price growth well above the Federal Reserve's 2% target.

The key numbers

According to the New York Fed and Reuters, the October survey showed:

• Inflation expectations unchanged at 3.9% one year ahead, 3.3% three years ahead and 3.0% five years ahead;
• the expected probability of losing one's job over the next 12 months up 0.4 percentage point to 13.9%, still below its 12-month average;
• the perceived chance of finding a new job after a layoff up to 46.5%, the highest since November 2025;
• median expected household income growth down to 3.0% and spending growth down to 5.3%;
• the probability of missing a minimum debt payment over the next three months up 1.6 points to 13.8%, the highest since December 2025.

The New York Fed said the increase in unemployment worries was driven mainly by respondents without a college degree.

Other readings were mixed. Expected home price growth held at 3.0% and expected earnings growth at 2.6%. Respondents put the chance of higher savings account rates a year from now at 31.6%, the highest since April 2023, and the chance of higher stock prices at 40.0%. The expected change in taxes at current income rose to 3.8%, the highest since December 2025.

Prices: relief at the pump, pressure on rent

Expectations for specific goods and services were mixed. Households anticipate a more moderate rise in gasoline prices, with expected year-ahead growth falling 0.6 point to 4.2%. Rent expectations moved the other way, jumping 0.9 point to 7.7%. Expected increases held at 5.5% for food and edged up to 9.3% for medical care and 7.6% for college costs.

Strong jobs data and a likely rate hike

The gloomier mood stands in contrast to official statistics. The Bureau of Labor Statistics reported on November 6 that the economy added 165,000 jobs in October, far more than economists had forecast, while the unemployment rate slipped to 4.1%. Average hourly earnings rose 0.4% on the month and 3.1% from a year earlier, and August and September payrolls were revised up to 186,000 and 60,000. The November report is due on December 4, just ahead of the Fed's December meeting. Fed officials have described the labor market as "low-hire, low-fire."

Reuters notes that Americans have struggled with high inflation linked to President Donald Trump's tariffs and a war in the Middle East, and that Fed officials are broadly expected to raise interest rates at their early December meeting to bring inflation back toward target. The survey was conducted in October, before the November 3 midterm elections in which Democrats won control of both chambers of Congress.

Why it matters

Consumer spending drives the bulk of U.S. economic output, so shifts in household sentiment are closely watched by policymakers and markets worldwide. A Fed rate hike would tend to strengthen the dollar and raise borrowing costs for emerging economies. For countries such as Ukraine, the dollar's path affects the cost of imports and external debt service, while the health of the U.S. economy shapes the political room for Washington's financial decisions.