The chill over American workplaces
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The still-low unemployment rate hides the bleak new reality for employees: rising fears of layoffs, uncertainty about the health of employers' business, and plummeting hope of finding other work.
Why it matters: High inflation crushed optimism in the Biden era. Now concern about the labor market and the economy is helping sink sentiment, a result of President Trump's fast-moving policy, including federal cutbacks.
What's new: Employee confidence — as measured by workers' confidence in their employer's business outlook — sunk to a record low in February, according to new data from workplace review platform Glassdoor.
- No sector saw a steeper drop than government and administration.
- Confidence among those workers fell nearly 5 percentage points last month, as the Department of Government Efficiency has "thrown the future of the federal workforce into disarray," Glassdoor said in a release.
- Employee confidence in the aerospace and defense sector fell 3.5%, reflecting, at least in part, expectations of spillover from federal cuts.
What they're saying: "It's not just about people being laid off, but it's also about people who are left behind and feel the impact," Glassdoor lead economist Daniel Zhao told Axios.
Flashback: This record low confidence, as tracked by Glassdoor, comes three years after the record high, a time when workers were in short supply and job hopping was easy.
- "Even if the hard economic data is not that different from the late 2010s, there might be this sense of loss relative to what could have been, maybe a sense of nostalgia for the labor market of years past," Zhao said.
Between the lines: The eroding confidence extends beyond DOGE anxiety.
- Employee confidence increased in fewer than half (10) of the 24 sectors tracked by Glassdoor in February, including health care, which has been responsible for a significant share of job gains in recent months.
What to watch: Key consumer sentiment indicators tell the same story of receding economic confidence. That has helped generate the "growth scare" that is top of mind for economists and investors.
- The New York Fed survey of consumer expectations showed respondents believe tougher economic conditions are ahead.
- The average respondent said there is nearly 40% chance the unemployment rate will be higher a year from now, an increase of more than 5 percentage points compared to January.
- The odds of missing a debt payment in the months ahead is the highest since April 2020.
The intrigue: Talk of layoffs across Glassdoor reviews is on the upswing. The share of reviews that mention "layoff" is up 5% from the same period last year.
- Callouts of inflation are down 13% from a year ago.
The bottom line: "As the balance of risks has shifted from inflation to the job market, we're seeing that reflected in how employees are talking about the the risks and challenges they face," Zhao said.
