The job market is strong, economists say — but workers don’t think so

The job market remains strong despite gradual cooling from pandemic-era highs, according to labor economists — but workers don’t seem to share that outlook.

Employee confidence fell last month to its lowest level since 2016, according to Glassdoor data. About 46% of workers reported a positive six-month outlook for their employers, down from 54% from a year ago.

Meanwhile, the ZipRecruiter Job Seeker Confidence Index was down six points in the second quarter to its lowest point since the beginning of 2022.

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The juxtaposition of a resilient labor market but deteriorating sentiment is likely due to financial stress among workers and the fact that the recent baseline was a scorching-hot job market in 2021 and 2022, economists said.

“Overall, workers still have more leverage and more job security than before the pandemic,” said Julia Pollak, chief economist at ZipRecruiter.

“I think job seekers comparing this environment to 2021 and 2022 do feel worse off,” she added. “It’s taking more effort to find a job, and jobseekers are searching under greater financial strain now.”

Several metrics — including job openings, quits, layoffs and the unemployment rate — suggest the labor market is healthy, economists said.

Daniel Zhao, lead economist at Glassdoor, said it is “softer but steady.”

“If you look at these indicators in aggregate, they point to a labor market that isn’t necessarily going gangbusters, but in a fairly stable state,” Zhao said.

Broadly, the indicators are largely in line or even stronger than pre-pandemic, a time when unemployment was low, people were joining the labor force and gender and racial employment gaps were narrowing, Pollak said.