US consumer confidence has fallen to its lowest level in over a decade. This decline persists despite a sturdy job market and low unemployment rates across the country.
The 3.1% Wage Growth Trap
The US economy is currently defined by a paradoxical "low-hire, low-fire" environment. According to the Conference Board, consumer confidence has dropped to its lowest point in more than ten years. While workers are not being laid off in mass numbers, they are finding it nearly impossible to move upward or outward in their careers .
This stagnation is most evident in paychecks. Average hourly pay rose by just 3.1% in August, which the report notes is the stingiest year-over-year increase since May 2021. Because hiring has stalled , workers lack the leverage to negotiate better salaries or work-life balance, leaving them feeling trapped in their current roles.
A 26% Approval Rating for the Economy
Public sentiment is reflecting this stagnation in the political arena. A poll from the AP-NORC Center for Public Affairs Research shows that only 26% of U.S . adults approve of President Donald Trump's handling of the economy. Even more stark is the 17% approval rating regarding the administration's management of the cost of living.
The psychological toll is further evidenced by data from Glassdoor. The Glassdoor employee confidence index has hit its lowest level since records began in early 2016. Chief economist Daniel Zhao suggests that workers are increasingly anxious about AI and the possibility of layoffs,even if those layoffs aren't currently happening at scale.
Why College Grads Aged 25-54 are Struggling
The struggle is not limited to entry-level workers. Researchers at the Federal Reserve Bank of San Francisco have found that prime-age workers between 25 and 54 with college degrees are struggling to find new employment. This is a departure from typical economic expansions where these demographics are usually the first to be re-absorbed into the workforce.
This trend suggests that the recovery is no longer reaching workers at the margins. As reported by Glassdoor, the fear of unemployment is amplified because those who do lose their jobs face a grueling search; the average unemployed person has been out of work for over six months,the longest stretch since February 2022.
AI Displacement and the Immigration Crackdown
Several factors may be driving this friction, though the exact cause remains unverified. The Federal Reserve Bank of San Francisco suspects a combination of President Trump's immigration crackdown, hiring freezes at tech firms and government contractors, and early AI-related displacement in professional occupations.
These variables have created a "chilly environment" where workers are unwilling to quit their jobs for fear of the open market. This uncertainty over government policy and technological shifts has effectively frozen the labor pipeline, making the prospect of career advancement feel out of reach for many.
From 491,000 Monthly Jobs to a 0-Job Break-Even
The structural requirements for a stable unemployment rate have also shifted. Economists now suggest the "break-even" hiring rate could be as low as zero jobs per month, a massive drop from the 150,000 required a year prior. This shift is partly due to baby boomer retirements and immigration policies reducing the pool of available workers.
When compared to previous eras, the current pace of growth is modest. While the 80,000 jobs added monthly this year is an improvement over the 2025 average of 9,700, it pales in comparison to the 491,000 monthly jobs seen during the 2021-2022 boom. As Glassdoor's Daniel Zhao noted, a modest improvement is not the same as creating genuine opportunities for career advancement.
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