Consumer sentiment has hit historic lows, according to the University of Michigan's latest research. Expectations for the job market are worse than at any point outside an actual recession, even as the hard data tells a different story.
A feeling of economic gloom is what unites most Americans: The University of Michigan's consumer sentiment index fell to 49.8 in April, its lowest reading in more than 70 years of polling, with declines across all political affiliations, income levels, ages, and education levels. 64% of survey respondents expect unemployment to be higher in a year, a level that has never before been reached outside of a recession. 73% of Americans say the economy is doing poorly, according to an April AP-NORC poll.
Much of the “hard data” tells another story: The overall economic gloom is at odds with the hard data. Experts say retail sales were solid in March, and note that jobless claims remain low. Last week, the S&P 500 and Nasdaq closed out the week “in record territory.”
Stalled hiring is keeping Americans' confidence in the labor market low: Hiring has slowed dramatically even as layoffs remain low, meaning people seeking work keep striking out, and that experience is coloring perceptions far beyond those directly affected.
Workforce confidence is in the tank, and it’s been in the tank for a bit of time now."
Read more via The Wall Street Journal, Marketwatch
As large employers pull back, the smallest businesses in the U.S. have become the primary engine of job creation, and they may offer new graduates a foothold that bigger companies aren't providing.
Businesses with fewer than 20 employees created more than 525,000 jobs in 2025 and added 169,000 more in the first quarter of 2026, outpacing all larger employer categories, according to ADP data. Without them, the U.S. economy would have lost 110,000 private-sector jobs last year.
Turnover at small employers hit a record low of 3.9% in March, and the pay gap between the smallest and largest employers has narrowed to 2.3 percentage points.
Nearly 1 million new grads will be hired at small businesses during the 2026 hiring season, roughly flat with last year, according to Gusto data covering more than 500,000 small businesses.
Overall hiring projections for the class of 2026 rose 5.6% from last year, according to NACE's Job Outlook Spring Update.
AI is creating a split even within small businesses: total small-business employment grew 9.6% from 2023 to late 2025, but employment in highly AI-exposed roles grew just 3.4%, with workers aged 22-28 in those roles experiencing headcount reductions.
Over the past year, small employers have doggedly continued to grow their payrolls while bigger companies have shed jobs or notched lackluster hiring gains."
Read more via CNBC, ADP Research
Consumer confidence rose slightly in April, though the overall picture remained mixed, according to The Conference Board.
The Consumer Confidence Index rose 0.6 points to 92.8, up from a revised 92.2 in March.
The Present Situation Index (consumers' assessment of current business and labor market conditions) dipped 0.3 points to 123.8.
The Expectations Index (consumers' short-term outlook for income, business, and labor market conditions) rose 1.2 points to 72.2, still below the threshold of 80 that typically signals a recession ahead.
Views of current business conditions worsened slightly, with 17.9% of consumers describing conditions as "bad," up from 15.8% in March.
27.3% of consumers said jobs were "plentiful" (essentially flat from 27.4%), while the share saying jobs were "hard to get" fell from 21.3% to 19.8%.
The share of consumers saying a recession in the next 12 months is "very likely" rose again in April.
Read more via The Conference Board
Initial unemployment claims dropped to 189,000 in the week that ended April 25, well below economist expectations of 212,000 and the lowest reading in more than 50 years.
Claims fell by 26,000 from the prior week's 215,000. Continuing claims dropped to 1.79 million, the lowest in two years.
The data suggest that high-profile layoff announcements have not yet translated into meaningful job cuts.
Read more via The Wall Street Journal, Bloomberg
A new Conference Board survey of 114 HR executives finds hiring and engagement expectations at their strongest levels since the index launched in 2023, even as other surveys point to rising uncertainty among CEOs.
59% of CHROs expect to increase hiring in the first half of 2026, up from 54% in Q4 2025. The CHRO Confidence Index hit a new high of 59.
Engagement expectations jumped sharply, with 53% of CHROs expecting engagement levels to increase, up from 43% last quarter.
Retention remains the weak spot: only 34% of CHROs expect retention to improve, and nearly half expect no change.
The findings contrast with a separate Vistage survey of CEOs, in which hiring expansion plans fell from 57% to 51% quarter over quarter, with the Iran conflict cited as a key source of uncertainty.
Workforce investment over the past six months has been concentrated on leadership and manager development (50%), followed by AI and automation for HR and operations (36%). Only 20% of those investing in AI directed funds toward learning and coaching tools.
Read more via The Conference Board, HR Dive
An unusually divided Federal Reserve held its benchmark interest rate steady for the third straight meeting Wednesday, as Chair Jerome Powell announced he plans to remain on the board of governors after his chairmanship ends May 15.
The Fed held rates unchanged for the third straight meeting, but the decision drew the most dissents since October 1992. The Fed cited elevated inflation, now at 3.3%, and a job market that has "ground almost to a halt" as key sources of uncertainty.
Powell described the labor market as "in balance, but an unusual and uncomfortable kind of balance where people who don't have jobs will have a hard time breaking in unless somebody quits their job."
Powell said he will stay on as a governor until an investigation into Fed building renovations is "well and truly over with transparency and finality," denying Trump an additional board appointment. His governor term runs through January 2028.
Earlier Wednesday, the Senate Banking Committee advanced Trump's nomination of Kevin Warsh as the next Fed chair on a party-line vote. Because Powell is staying, Warsh will take Governor Miran's seat rather than Powell's, leaving the board's balance of hawks and doves largely unchanged.
Read more via AP News, CNBC
The Department of Labor has published a proposed rule aimed at clarifying when two companies share legal responsibility for the same employee, a question with significant implications for wages, overtime, and labor law compliance.
The proposal introduces a four-factor test to determine joint employment: whether a company hires or fires the employee, supervises their work schedule or conditions, determines their pay, and maintains their employment records.
Joint employment is most common in staffing, franchising, construction, and farming, where workers often perform labor that benefits more than one company.
The rule also clarifies that common business practices like providing a sample employee handbook or requiring anti-harassment training do not by themselves create joint employer status.
The 60-day public comment period runs through June 22.
Read more via Fortune
The budget carrier ceased operations at 3 a.m. Saturday after a federal bailout fell apart, ending 34 years of service and triggering an immediate scramble to help displaced employees.
About 17,000 direct and indirect employees lost their jobs with no advance notice. Many learned via a middle-of-the-night email or from their union while the airline's website and app went dark.
The Association of Flight Attendants sent an urgent letter to the Transportation and Labor secretaries asking that Spirit's roughly 5,000 flight attendants receive earned wages, vacation pay, and a $600 weekly federal supplement to state unemployment while they look for work.
Florida's economic development office organized an emergency rapid response event Monday for displaced workers in Hollywood, offering resume assistance, job search support, and career counseling.
Several major carriers moved quickly to help displaced workers. United capped fares at $199 on Spirit routes and explicitly invited former Spirit employees to apply for open roles, saying it would prioritize their applications. A trade association representing major U.S. airlines noted that member carriers were also promoting job vacancies to former Spirit staff.
Read more via CNBC, Business Insider, NBC News, Detroit News, United Airlines
China: Beijing announced plans to upskill 1 million young jobseekers in fields like AI and robotics, including encouraging university graduates to return to vocational school. The policy has drawn backlash from young people already frustrated by a youth unemployment rate above one in six. A record 12.7 million new graduates are expected to enter the job market this summer. (South China Morning Post)
Germany: The economy grew 0.3% in the first quarter, a surprisingly positive result against a backdrop of rising energy prices and fragile supply chains. Economists have nonetheless downgraded their full-year forecasts to around 0.5%-0.6% growth, roughly half of what many had anticipated before the Iran conflict. (Yahoo Finance)
Japan: Labor conditions improved in February, with unemployment falling to 2.6%, but retail sales unexpectedly declined 0.2% year-over-year and industrial production fell 2.1% month-over-month, painting a mixed economic picture. (MSN)
Mexico: GDP fell 0.8% in the first quarter, the largest quarterly decline since late 2024, and was nearly flat year-over-year at 0.1%, stoking recession fears. Both figures came in below economist expectations. (MSN/Bloomberg)
Switzerland: A referendum proposal to cap the country's population at 10 million by 2050 is gaining support ahead of a June 14 vote, with 52% of respondents in favor in a recent poll. Opponents warn the measure could force Switzerland to abandon its free-movement agreement with the EU and damage its economy. (Time)
