Image Source: https://www.bloomberg.com/news/newsletters/2025-09-05/limp-us-jobs-report-may-show-a-market-about-to-climb-or-sink
Job seekers attend a fair in Chicago.Photographer: Jamie Kelter Davis/Bloomberg
WASHINGTON — U.S. consumer confidence rose in March, but a sharp drop in hiring and job openings points to a weakening labor market, raising risks for economic growth, March 31, 2026.
Data released Tuesday highlighted a growing disconnect between sentiment and underlying conditions. While confidence improved modestly, labor demand softened markedly, suggesting businesses are pulling back even as households remain cautiously optimistic.
The Conference Board said its consumer confidence index rose 0.8 point to 91.8, beating expectations. But the gain masked rising concern about inflation and employment.
Households’ median 12-month inflation expectations jumped to 5.2%, the highest since May 2025, reflecting higher gasoline prices and tariff-related costs. Consumers also grew more cautious about spending, with fewer planning major purchases in the coming months.
“Comments about prices and the cost of goods suggest that the cost of living remained at the top of consumers’ minds,” said Dana Peterson.
Meanwhile, labor market data showed clear signs of cooling.
Figures from the Bureau of Labor Statistics showed job openings fell by 358,000 to 6.882 million in February, with declines concentrated among small and mid-sized businesses. Hiring dropped by 498,000 to 4.849 million, the lowest since early in the COVID-19 pandemic and, outside that period, the weakest since 2014.
Layoffs edged higher, while the share of consumers saying jobs are “hard to get” rose to its highest level in three years.
“This is not a good omen for the health and vitality of the labor market,” said Christopher Rupkey, chief economist at FWDBONDS.
Economists said policy uncertainty and rising costs are weighing on both hiring and sentiment. Measures tied to Donald Trump’s trade agenda have pushed up prices, while a monthlong U.S.-Israeli conflict with Iran has driven oil prices sharply higher, lifting gasoline above $4 per gallon.
The combination of rising inflation expectations and slowing job growth complicates the outlook for the Federal Reserve. Federal Reserve Chair Jerome Powell recently warned of “downside risk” in the labor market, even as policymakers hold interest rates steady.
Economists caution that weakening hiring and rising costs could weigh on consumer spending, the primary driver of U.S. growth.
“The ‘four horsemen’ — hiring, layoffs, job openings and unemployment — suggest deterioration even before the oil shock,” said Michael Gapen, chief economist at Morgan Stanley.
While higher-income households continue to support spending, rising fuel costs risk eroding discretionary income more broadly.
Taken together, the data point to an economy losing momentum: job openings are down more than 1.5 million from a year ago, hiring is near decade lows, and inflation expectations are climbing — a combination that could test the durability of consumer-driven growth in the months ahead.