Wednesday, August 10, 2022
Economy and AnalysisDespite Lingering Unemployment, Jobless Americans Remain Confident

Despite Lingering Unemployment, Jobless Americans Remain Confident

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Despite remaining concerns about unemployment and the continued pandemic, a new survey indicates that Americans -even those who remain out of work — are now mostly optimistic about the economy and their personal finances.

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, people who remain jobless say 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 a good portion of Americans believe that the worst of the financial woes caused by COVID-19 are behind us and that 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.”

Everyone over 16 in the U.S. is now eligible to be vaccinated against Covid-19, and indeed it seems like that is driving consumers’ growing optimism about their personal financial outlook.

The Job Index Is Looking Good Too

This week The Jobs Index also shows improvement for the unemployed, after a downward slide of about 10 points since late March. 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 the prior 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.

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, mostly due to the ongoing COVID-19 crisis. 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.”

As fear of the spreading virus continues to decrease, more and more of these jobs should become easier to fill.

The upbeat survey also showed a strong increase in vacation plans, which suggested the economy continued to power ahead early in the second quarter after what appears to have been robust growth in the first three months of the year.

As more and more Americans get vaccinated, and we continue to emerge from the pandemic, growth this year and increases in consumer confidence is expected to be the best in nearly four decades.

“Consumers are seeing the light at the end of the COVID tunnel,” said Ben Ayers, senior economist at Nationwide in Columbus, Ohio. “Led by strong spending as households return to eating out, traveling and visiting stores, the economy should surge ahead starting the second quarter and likely carrying into 2022.”

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