New data from the New York Fed suggests Americans are gaining confidence in the labor market, even as broad uncertainty around trade policy, interest rates, and other unknowns clouds the economic outlook.
According to the New York Fed’s May 2025 Survey of Consumer Expectations, the perceived chance that the US unemployment rate will rise over the next year fell by 3.3 percentage points to 40.8%.
It’s a notable drop as the labor force remains mostly stable. But the figure still sits above the 12-month average of 37.7%, suggesting caution hasn’t disappeared entirely.
Consumers are also feeling a bit more secure in their own roles. The perceived likelihood of losing a job over the next year fell to 14.8%, the lowest level since early this year. At the same time, the expected quit rate, or the probability of voluntarily leaving one’s job, nudged slightly higher to 18.3%.
Inflation expectations also cooled in May, mirroring the improved outlook in the labor market, just ahead of this Wednesday’s Consumer Price Index (CPI) release.