Why Jobless Americans Are Feeling More Confident, Despite Continued Unemployment
Everyone over 16 in the U.S. is now eligible to be vaccinated against Covid-19—and this good news parallels consumers’ growing optimism about their financial outlook.
Overall consumer confidence reached 60.7 (out of 100) this week, according to the Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker. That’s an increase of 1.2 points from last week and 10 points above the pandemic average.
The survey, conducted by Ipsos, measures consumer sentiment over time.
Even people who are out of work are feeling a confidence boost this week. The survey found that unemployed Americans enjoyed a boost in confidence about the economy and their finances this week, jumping up 6 points to 55.3.
However, they’re still less confident than those who are employed at least part time. This week, part-time workers reported a confidence level of 61.6; for full-time workers, it was 62.8. But improving overall confidence, including from those who are out of work, signals that Americans believe there are brighter days ahead.
“The improving public health situation offers a light at the end of the tunnel,” says Daniel Zhao, senior economist at workplace review website Glassdoor. “During the pandemic, many Americans dropped out of the workforce because of health concerns or childcare needs or were forced through layoffs in hard-hit industries. With vaccine distribution accelerating, the impending reopening offers an opportunity for unemployed Americans to return to work as the economy more broadly reopens.”
Jobs Confidence Spikes for the Unemployed
The Jobs Index also shows improvement for the unemployed, after a downward slide of about 10 points since late March. The index measures respondents’ job security confidence, job loss experience and employment outlook.
This week, people who aren’t working had a jobs confidence of 62.8 while full-time workers came in slightly higher at 65.7 (out of 100).
Jobs confidence for people who aren’t working hit its lowest point since the start of 2021 in mid-February, when it wasn’t certain that federal unemployment benefits would be extended through the summer. Jobs confidence has surged and fallen at various points since then, but has not yet been able to match the confidence level for people working full-time.
Sixty-one percent of respondents said that they’re more confident about job security for themselves, along with their family and friends, than they were six months ago. That’s an improvement of five points from last week.
“Even though they have not found a job yet, the unemployed are sensing the improvement in the market and becoming more optimistic about their future prospects on average,” says Kevin Harrington, CEO of job-search platform Joblist. His platform saw openings increase notably in the last two months. “We are now seeing sustained positive momentum broadly and notable hiring gains in some of the hardest-hit industries like retail and restaurants,” he says.
Last week, there were 547,000 new claims for unemployment benefits. That’s the lowest level for initial claims since March 14, 2020 (256,000)—the week former president Donald Trump declared a state of emergency due to the coronavirus.
The unemployment rate sits at 6%, with nearly 10 million people still out of work.
Although job opportunities are starting to reappear, some businesses are having a hard time filling open roles. A March survey by the National Federation of Independent Business found that 42% of its members had open jobs they could not fill.
“This is not a typical recession where a wide pool of unemployed Americans is available to employers,” says Zhao. “The pandemic is still going on, which means that millions of Americans are still unable or unwilling to look for work as they juggle health concerns and childcare needs.”
Meanwhile, many roles, especially at smaller businesses, are customer-facing—and that still makes some workers nervous. “Virus risk and uncertainty still exists, which makes it harder to hire for roles that require face-to-face contact,” Harrington said.
Joblist recently found that nearly 30% of hospitality workers are switching out of the industry permanently, instead seeking roles in retail or office settings. “Even as those businesses and job opportunities rebound, many of the workers have already moved on. Over the course of the pandemic, these workers found jobs with larger companies that continued hiring throughout, switched industries altogether, or used the time to transition to remote or freelance work,” Harrington says.
Pandemic-induced job switching could cause long-term hurdles for businesses looking to make up some of the losses they incurred in 2020.