The Federal Reserve Bank of New York’s December Survey of Consumer Expectations delivered a stark snapshot of how Americans feel about work and money as 2025 closed: the share of people who say they could find a new job if they lost theirs sank to a series low of 43.1%, while the perceived chance of missing a debt payment jumped to its highest level since the pandemic.
The survey, fielded from December 1–31, 2025, paints a mixed picture. On one hand, short‑term inflation expectations ticked up (median one‑year ahead inflation rose to 3.4%); on the other, many households are growing more anxious about their labor prospects and near‑term finances. You can read the New York Fed’s full release here: New York Fed Survey of Consumer Expectations.
A record low for job‑finding prospects
Respondents’ mean perceived probability of finding a job if they lost their current position fell 4.2 percentage points to 43.1% — the lowest reading since the survey began. The drop was concentrated among people with household incomes under $100,000, those over 60, and respondents with a high school degree or less. At the same time, the mean perceived probability of losing one’s job rose to 15.2%.
That combination — feeling both likelier to lose a job and less able to replace it — helps explain why delinquency fears are rising. The survey’s measure of the chance of missing a minimum debt payment in the next three months climbed to 15.3%, the highest since April 2020, and it rose most sharply for older Americans, lower‑income households and those without a college degree.
Consumers see better days ahead — sort of
Counterintuitively, households reported slightly more optimistic assessments of their current finances and somewhat rosier year‑ahead expectations. Median expected household income growth nudged up to 3.0%, while median expected household spending for the year fell slightly to 4.9%. Earnings growth expectations remain subdued (median one‑year earnings growth dipped to 2.5%), and uncertainty about inflation rose across horizons.
Why employers aren’t hiring as freely
The survey’s labor findings mirror other indicators pointing to a “low‑hire, low‑fire” market. Hiring activity outside health care and leisure & hospitality has been weak, producing what some economists call a hiring recession: pockets of growth amid broader stagnation. Policy uncertainty — including shifts in trade and immigration policy — and firms’ experimentation with automation and AI have also made many employers cautious about expanding payrolls. For context on the growing role of AI tools in business settings, see reports on recent advances like Microsoft’s MAI image work and new agentic features in Google’s AI Mode.
A policy dilemma for the Fed
For Federal Reserve officials the survey deepens a familiar tension: inflation expectations are sticky enough to keep policy makers’ attention, yet the labor market shows signs of fragility that could translate into higher delinquencies and financial strain for vulnerable households. The mean probability that the U.S. unemployment rate will be higher a year from now remains elevated (41.8%), even after a small month‑to‑month dip.
Markets and policymakers will be watching the official January inflation and employment data for clearer signals — but the New York Fed’s panel underscores that headline job numbers don’t capture the whole story. Behind any aggregate gain are workers in certain sectors and demographic groups who are markedly less confident about their prospects.
What this means for workers and households
- Job seekers may face longer search times, especially older workers and those with lower education or incomes.
- Rising delinquency expectations suggest pressure on household budgets could intensify if labor market weakness persists.
- Even as many consumers report modestly better finances today, downside risks remain concentrated among the groups least able to absorb shocks.
The survey is a reminder that labor‑market health is multi‑dimensional: headline job counts matter, but so do people’s perceptions about their ability to replace lost income. That sense — whether pessimistic or not — will shape spending, borrowing and households’ willingness to take financial risks in the months ahead.