Unemployment Expectations Worsen in October, New York Fed Says

03:47 PM EST, 11/07/2025 (MT Newswires) -- Unemployment rate expectations continued to worsen in the US last month, a survey by the Federal Reserve Bank of New York showed Friday.

The mean probability that the jobless rate will rise in the next 12 months rose by 1.4 percentage points to 42.5% in October, marking its third consecutive monthly increase, according to the Fed branch's latest Survey of Consumer Expectations.

Expectations of finding a job dropped by 0.6 percentage point to 46.8%, while the probability of losing a job in the next 12 months declined by 0.9 percentage point to 14%.

On Thursday, Challenger Gray & Christmas said US job cut announcements surged 183% sequentially and 175% annually to 153,074 last month. Employers have so far announced about 1.1 million job cuts this year, the highest year-to-date total since 2020, the data showed.

On Wednesday, Automatic Data Processing (ADP) said that employment in the US private sector increased more than expected in October following two consecutive months of weak hiring.

The Fed lowered its benchmark lending rate by 25 basis points last week as it reiterated concerns over labor market conditions. In his post-meeting remarks, Fed Chair Jerome Powell indicated uncertainty around a potential rate cut in December, while some central bank officials have expressed worries over persistent inflationary pressures.

The median one-year inflation outlook declined by 0.2 percentage point to 3.2% in October, while expectations held steady at 3% at the three- and five-year horizons, according to the NY Fed's report.

US consumer prices grew less than expected in September, while core inflation surprisingly ticked down, the Bureau of Labor Statistics reported late last month. The agency originally planned to release the September consumer price index report on Oct. 15, but rescheduled it due to the ongoing government shutdown.

Consumer sentiment fell to the weakest level in more than three years amid concerns about the shutdown's impact on the economy, preliminary results from a University of Michigan survey showed Friday.

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