Consumer confidence in job market weakens, raising pressure on Fed to consider rate cuts

Consumer confidence in the labor market declined in June, with only 29.2% of respondents saying jobs are "plentiful," down from 31.1% in May. The labor market differential—a key sentiment metric—fell to 11.1 percentage points, its lowest level since March 2021. This weakening sentiment aligns with real labor data: unemployment claims are rising, hiring is slowing, and job prospects are worsening for tech workers and new graduates. As a result, the broader Consumer Confidence Index dropped unexpectedly. While some Federal Reserve officials urge caution and consider interest rate cuts, others remain cautious, citing broader strength in employment metrics. Economists argue that consumer perceptions may signal deeper labor market issues before official data does, pushing for the Fed to consider loosening policy sooner.