American workers are lowering their expectations of the pay rate they want to take a new job, according to research by the Federal Reserve Bank of New York.
The New York Fed’s Survey of Consumer Expectations found that the so-called reservation wage for a new job declined to $74,236 in March from $82,135 in November, which was the highest level in the data series. The report found that the lowered wage expectations were driven by men and workers over the age of 45.
With last month’s decline, the reservation wage dipped to near the level it was in November 2023, when it was $73,391.
The New York Fed’s survey also found that 14.9% of respondents see the probability of getting at least one job offer over the next four months, which declined from 16.2% in November.
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Respondents’ expectations that the unemployment rate will be higher one year from now jumped 4.6 percentage points to 44% in March – the highest reading since April 2020. The increase was broad-based across age, education and income groups.
The perceived probability of losing one’s job in the next 12 months increased by 1.6 percentage points to 15.7%, which is the highest level since March 2024. That increase was largest for respondents with annual household incomes below $50,000.
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Respondents were also less likely to report the expectation that they’ll have to work in their older years. Just 47.3% of respondents said in March that they expect to work beyond age 62, while 31.6% said they think they’ll work beyond age 67. Those are both down from November, when the figures were 50.6% and 34%, respectively.
The willingness of workers to take less pay for a new job comes amid a weakening of consumer expectations about economic conditions in the time since President Donald Trump took office and imposed sweeping tariffs on U.S. trading partners, prompting retaliation by foreign countries and an escalation of the trade war.
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Federal Reserve officials have said they expect consumer prices to rise as a result of tariffs, with unemployment expected to edge higher and economic growth expected to slow markedly.
Economists have been increasing the probability of the U.S. economy entering a recession, in part due to economic dislocations caused by the trade war.
The International Monetary Fund (IMF) on Tuesday said it now sees a 37% chance of a recession for the U.S. economy, up from 25%.
Reuters contributed to this report.
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