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(Bloomberg) — Americans’ view of the labor market grew somewhat more pessimistic in May, with the perceived prospects for job seekers hitting their lowest point this year, according to a Federal Reserve Bank of New York survey released Monday.
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The survey also showed consumers’ inflation expectations remained largely unchanged from a month ago.
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The report followed an unexpectedly strong employment report for May with job gains beating expectations. For Fed officials, the report put to rest for now concerns that the US labor market remained fragile and stoked worries over inflation. Policymakers’ preferred measure of inflation hit 3.8% in April, amid a spike in energy prices.
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Fed officials are expected to hold interest rates steady when they meet on June 16-17 in Washington, their first gathering led by new Chairman Kevin Warsh.
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The New York Fed report gave mixed signals about the labor market. The perceived probability of losing one’s job in the next 12 months rose in May by half a percentage point to 15.1%. Meanwhile, the perceived ability to find a job fell by 2.3 percentage points to 43.7%, the lowest reading since December.
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Despite that, the expected quit rate — or the probability of leaving one’s job voluntarily in the next year, usually a sign of confidence in the labor market — rose in May to the highest since February of 2023. The increase was broad-based across age, education and income groups, the report said.
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Inflation Expectations
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Consumers said they see inflation at 3.5% over the next year, down from 3.6% in April. Expectations for inflation over three years and five years remained steady in May at 3.1% and 3%, respectively.
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The New York Fed survey also reinforced other reports showing consumer sentiment is at record lows, dragged down by the highest jump in gas prices in years and a wave of aggressive tariffs. The share of households who said their financial situation was worse than last year reached its highest level since January of 2023. More consumers also expected a deterioration in their finances in the year ahead.
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Perceived probabilities of missing a minimum debt payment in the next three months also rose in May, driven by consumers with a high school degree at most and annual income below $100,000.
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