A concerning trend is emerging in the U.S. labor market outlook, as new data from the New York Federal Reserve highlights growing pessimism among consumers. According to the latest survey, 44% of U.S. consumers now believe that the unemployment rate will be higher in one year — the highest level since the 2020 pandemic period.

The chart, based on data from Macrobond and the Federal Reserve Bank of New York, shows a sharp spike in this expectation. Over the past two months alone, the average probability that the unemployment rate will be higher in a year surged by 10 percentage points. This marks the second-largest two-month increase in the survey's history, underscoring the rapid shift in sentiment.

Looking at the chart’s historical data, this probability last reached current levels (above 43%) in mid-2023 and earlier in late 2022. Prior to that, such high levels were seen during the COVID-19 shock in 2020, where the metric briefly spiked above 50%.

In addition to concerns about broader unemployment trends, consumers are increasingly worried about their own job security. The perceived probability of losing one’s job within the next 12 months rose to 15.7%, the highest since September 2020.

The chart reflects volatile swings in unemployment expectations over the past decade, with the most recent surge showing a steep vertical rise, highlighting the abrupt change in consumer outlook.

This data adds to a growing list of indicators signaling reduced confidence in the labor market. As expectations of rising unemployment grow, concerns about economic stability and household security are likely to deepen further in the months ahead.