A recent Gallup poll found 31% of US workers are “worried they could soon be laid off.” That number is “similar to the 31% seen in August 2009 but double the level recorded in August 2008 and for several years prior.”

This could have several interpretive meanings for the markets and economy:

Negative for Economy: The working public sees company activity and sales first hand, and can sense when their employer is in trouble.
Negative for Politicians: The 2007-09 Recession was already in full swing while Politicians were denying (See Mental Recession). The public was much more astute and insightful than much of DC
Positive for Economy: Due to the Recency effect, people’s outlooks are backwards looking, greatly impacted by their most recent experiences. In the present case, the fear is of another credit crisis like event.
Positive for Markets: As a contrary indicator, the public’s fears can work well as an entry signal for trades. The last time job insecurity peaked was mid-2009, not a bad entry for equities.

I have no particular insight which of these are correct — I wanted to lay them out for discussion purposes.


In U.S., Worries About Job Cutbacks Return to Record Highs
Three in 10 workers worry they could lose their job, double the level seen in 2008
Lydia Saad
Gallup, August 31, 2011

Category: Contrary Indicators, Data Analysis, Employment, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

41 Responses to “What Do High Levels of Job Anxiety Signify?”

  1. Clem Stone says:

    I’d leave this indicator out of my toolbox but if you put a gun to my head I’d vote for contrary.

  2. FS says:

    It’s a reflection of policy. Change the policies, change the perception. We have a left wing that is absolutely clueless
    about creating economic growth (not saying the righty’s are geniuses).

    Agree that it is likely somewhat of a contrary indicator.

  3. rktbrkr says:

    Not good news for discretionary spending or the anemic 1%ish “recovery” slipping slowly into doubledipland

  4. krice2001 says:

    @ FS — “We have a left wing that is absolutely clueless about creating economic growth (not saying the righty’s are geniuses). ”

    The left wing is in charge of policy in the U.S.??? Hmm… I’ll have to look harder for it.

  5. number2son says:

    We have a left wing that is absolutely clueless…

    Really? There hasn’t been a genuine liberal economic policy implemented in decades. Talk about clueless.

  6. VennData says:

    We have a left wing that is absolutely clueless….

    What about all those give away programs to a few people getting rained on. That is the height of euro-socialism! I don’t give a damn about those people on the East Coast. They can secede for all I care …unless I beat ‘em to it.

    Rick Perry

  7. Julia Chestnut says:

    I think that this as a “contrary indicator” is evidence of the divorce of the equity market from the real economy — and I’ll tell you why. If you ask the average person how the economy overall is going, or which direction the stock market will go – that’s a contrary indicator. By the time the plebes have an opinion, the smart money is long, long gone.

    This is a different question on a topic that the average person knows all too well and understands at a gut level. Of course, change leads to a background level of anxiety that might be backward looking – can’t argue there. But your graph shows people rolling with the punches more than that, and seems to line up with actual conditions rather than to involve a lag. And think about it: historically, Americans have been a ridiculously optimistic bunch. To have this level of concern about current and future conditions is a sea change.

    If the market goes up after this kind of a statement by the ordinary people out there who still HAVE jobs, that says something fundamental is broken.

    I vote negative on the economy. How that will relate to the stock market (which strikes me as a huge, sloshing pool party of loose liquidity from a very small part of the universe) I can’t say.

  8. arogersb says:

    “hasn’t been a genuine liberal economic policy implemented in decades”
    what about the keynesian stimulus and bailouts? And what about housing subsidies?

    Agree with rktbrkr, this should have a direct impact on consumption. On the other hand it´s a good job market for companies to chose from (lower wage inflation, lower costs, more productivity, les job turnover).

  9. Bokolis says:

    I’m not so sure that the public is much more astute and insightful than much of DC. If they are, it isn’t saying much. The 2008 number was when the spit was inches away from the fan. Regardless of whether we term this a double-dip rather than one long recession, I’d rather believe that, given that the public hasn’t been lulled into a false sense of security by a period of good times in between downturns, the public is in full fool-me-twice mode.

    I also think the markets’ assumption is that workforce profits = yay! more profits. I’d say that the first round of cutting was more geared toward whacking weakest link rank and file. If you believe that those people contibuted nothing to profits, it would support the above. But, I’m not sure that companies have hired up enough to do that again. I’d expect more assassinations of middle and upper management this time around, where contibutions to profits may not matter as much as workplace politics.

  10. ephinz says:

    Isn’t “contrarian” what market professionals want it to be? My guess is we remain at a historical point where past models are broke.

    I wonder, does anyone else see Canada’s negative 2Q GDP number as ominous? After all, they are a natural resource play and shouldn’t their economy be booming?

  11. louis says:

    That everyone with Power during the last 20 years was an idiot?

  12. ga082003 says:

    Add up everyone debt problems and the amount if 795 billion euros. Add up the solution to the problem, we reach a number 440 billion euros.

    In charts

  13. Raleighwood says:

    Maybe ordinary folks have (finally) figured out what globalization actually means to the rank and file.

  14. Jim67545 says:

    This coud be interesting but I’d like first to know what population was sampled and how was it stratified? I’d anticipate quite different responses if it was predominantly large company vs. small business vs. government. To know what it’s saying we need to know who is saying it.

  15. Pointfinder says:

    It’s a fear index. A VIX for the workingman.

  16. number2son says:

    what about the keynesian stimulus and bailouts? And what about housing subsidies?

    A perfect case in point about just how “clueless” so-called critics of liberal policy can be. Are you actually serious that a stimulus program that was half-hearted at best and a bailout that favored corporations to the exclusive detriment of main street is “left” in its orientation. Incredible.

    And housing subsidies? WTF are you talking about?

    Has political discourse in this country shifted so far to the right that coherent arguments are no longer possible?

  17. gordo365 says:

    People know that the US was almost bankrupt last month. We were almost bankrupt. Right? Maybe people actually believed all the doom and gloom reporting and assumed that a us bankruptcy would be bad for jobs.

  18. AlaskanPete says:

    What do high levels of Job Anxiety signal?

    Clearly they signal the state of corporate moral standing, which is at modern day lows. There is no longer any loyalty to employees or appreciation for spending their lives making money for these companies, no concern for their welfare and ability to live a comfortable and secure life, no backbone of the community aspect.

    The corporate model has gone full-metal-greedhead. Anything to juice the numbers, regardless the effect on the workforce, the community, the country, or even the company itself. Make the numbers, get the bonus, move to the corner office one floor higher.

    It isn’t a contrary indicator, it is the everyday reality of the corporate employee in 21st century USA. My mother put in 27 years with a hospital, rising from the lowest pharmacy tech position to the head of pharmacy for the chain. Laid off to hire a fresh college grad with lower salary, but the execs did get sweet bonuses that year for their “streamlining and right-sizing” which boosted profits. Repeat 900 variations on this theme and you have the state of the american worker today.

    But it isn’t just a recency effect from the downturn, it’s also that people can’t find jobs. Long term unemployment is at levels unseen in modern history. As a cynical gen-xer the only reality we’ve known is the steady middle finger treatment that companies have given the worker, it’s only gotten more brazen and picked up speed as offshoring gained traction. But the boomers, who are likely the most anxious contingent, neither saved adequately for retirement, nor are desirable new employees (even with the experience and institutional knowledge) because it’s all about THE BOTTOM LINE.

    A recalcitrant, rabid right wing base, in the death rattles as demographics overtake them, are lashing out in those death rattles for one last party before the curtain comes down (serving tea, apparently). Thus, everything we learned about ameliorating the business cycle, Japan’s lost decade and zero lower bounds, and the dual mandate of the fed reserve (hello, interest rates are at generational lows, there is no wage half to a wage-price spiral, focus on the employment half of the mandate please!) is tossed aside as general keynsian denial and goldbuggery buggers us all.

    So what does it signify? Simple one element indicative of the continuing destruction of the middle class. Job security? Pffft. Not when the CEO making 500 times what the average worker does needs a need Patek Phillipe to go with the Audemars Piquet (Rolex is so nouveau, after all).

    Good day gentlemen.

  19. Good for business, probably bad for the economy. Bargaining power goes up for business when layoffs are hanging overhead and that would cause people to be tight with the cash

    @ ephinz,

    I don’t think you need to worry much about that Canadian number. I think it might be a one off due to the Tsunami. We are a bit tapped out here due to debt but I think there is still economic health. We need to keep an eye on it because if this goes further it could mean that our personal debt problems are catching up to us here in Canada but even then it probably wont be a significant problem for us. Maybe just a slowdown

  20. arogersb says:

    And housing subsidies? WTF are you talking about?
    I am talking about Fannie and Freddie which received cheap funding thanks to government backup, this cheap capital in turn ended up subsidizing housing, thus the bubble.
    You call billions of dollars “half-hearted”. Wow. But yes, the stimulus program is leftist in its philosphy because it assumes that government can drive and improve the economy. True Free marketers opposed both stimulus programs and bailouts.

  21. AHodge says:

    it aint paranoia if they are after you
    the jobless rate went from 4.4% in 06 07 latest in may o7
    to 10.1% peak and now 9.1%
    or the more expanded U-6 measure now 16.1 peak of 17
    its been going th wrong way mostly for 5 years.

    there is always a circularity problem job loss >sentiment> job loss
    the cycle is broken
    almost invariably
    when sentiment turns up first
    while we have had some self inflicted sentiment damage lately
    i will bet next mo #–i know one month only– look a little better as last taken in the middle of default armageddon

  22. rpseawright says:

    @AlaskanPete –

    Your narrative rings true and unemployment is surely a major problem, but I’m not sure that the data supports the “death of the middle class.”


  23. nofoulsontheplayground says:

    I would attribute the high level of anxiety to the continuingly high U6 unemployment rate.

    Employed people with families and friends continue to be involed in the stories of those in their social circle who are unemployed. They are experiencing a mood unlike any period seen since the early 1980′s double dip recessions.

    It is also noteworthy that the chart shown starts in the middle of the internet bubble, which is hardly a reasonable starting point for employment moods.

  24. AlexM says:


    The US was never “almost bankrupt”. We print own own currency, unlike Greece, so there can never be a US bankruptcy as long as the printing presses work.

    Alaskan Pete,

    Great summary of what ails America today. Boomers didn’t save for retirement for many reasons. People forget the ruinous inflationary years during the 70′s and 80′s, not to mention 10% mortgages. This was back in the olden days when they actually cared whether you could pay back the mortgage, and appraisals meant something. Everything was inflating especially food and back to back energy crises didn’t help. Sure, they could have done a better job saving, but they were counting on being employed until they decided to retire, with good salaries and benefits and they could downsize their home. Plus boomers are undesirable because of the cost of their health insurance is quadruple of a young person. (Which is why we need an alternative to company health insurance) .

  25. nofoulsontheplayground says:

    FWIW, the chart of the Chicago PMI has a H&S top that measures to 42, just above the 2008-2009 recession lows.

  26. AlexM says:


    Define middle class. Also that chart is not as impressive at it seems at first as the vast majority of tax payers are not in that class. And does it surprise anyone that the upper middle class are doing so well?

  27. willid3 says:

    thinking this isn’t good for business. having fewer potential customers is never good. but it was really good for the executives who got their bonuses because they acted for the company. or so they say.
    suspect that its nothing more than the final realization of the entire purpose of globalization.
    which was to break the spirit of workers. and increase short term profits (like almost all executive decisions are). but it will crush the middle class and removes a huge base of customers. and that scam of its providing cheaper goods. is just that. they didn’t reduce the prices that much.
    the impact to the economy is that as the vast majority of customers (those who work) take this ‘new’ economy as reality, they will cut back even more. which leads to a downward trend in GDP (which didn’t get changed to include offshore profits as some had pushed for).
    which will make profits for business even tougher to get. hard to get mush in profit when customers start disappearing

  28. anewc2 says:

    “In the present case, the fear is of another credit crisis like event.”

    This is only positive for the economy if the fear is wrong. The people who made the credit crisis were rewarded for it. Why is it wrong to fear another one?

  29. Raleighwood says:

    If it can be off-shored, it will be off-shored.

    The multi-national corporations find nations to be an impediment to their bottom line. And if the middle class made our Nation strong than the middle class has got to go. Along with the constitution. Patriot Act II anyone?

  30. AlaskanPete says:

    So I had a little too much rant and too little substance above, but it’s been a stressful week/month/year (and I’m not even trading these days, got out of equities a year ago and basically sitting it out waiting for the next leg down).

    If you want a contrary indicator using extreme readings to signal potential turning pointsm, I would look to consumer confidence long before job anxiety. Job anxiety is the result of a long term trend of the things I ranted about above, while consumer confidence measures are more likely to reflect the business cycle.

  31. [...] does elevated job anxiety imply for the economy and stock market?  (Big Picture, Capital [...]

  32. AlexM says:

    Not to mention that the unemployed do not usually file tax returns.

    BR: False.

    The unemployed typically have employment impropriety years, or part time employment, or unemployment insurance benefits, all of which are taxable events.

  33. David in D says:

    @rpseawright: Very informative graphs and blog. It is counter the common narrative. That said, the blog post failed to capture the privatization of the higher education system and rising healthcare costs. When you consider that University tuition is increasing at around 5% per year (the past 30 years) and healthcare cost increasing by double digit growth each year, the ‘middle class’ is actually moving backward. Additionally, the jobs of today (and certainly tomorrow) require higher levels of education further exacerbating the problem.

    That said, your post is food for thought against the mainstream idea of the ‘dying middle class’ — so thanks for posting it.

  34. deanscamaro says:

    The U.S. Government continues to ignore the U6 unemployment rate, which workers see in real time (those guys on both sides who aren’t working) and that makes them worry. Workers see employment continuing to flow overseas. Companies are sitting around waiting for the consumer to spend and start heaping on more personal debt, with the idea that if the company has to wait too long, they are going to have to lay off some/more people to stay in business (or potentially send the jobs overseas to reduce costs). Those who are employed know this through the company grapevine and it adds to the worry of being laid off. Then with the debt they accumulated over the years, which doesn’t dissolve in a few months, is now being worked down. That effort stops if they lose their job, so they worry. With all that, I don’t wee why it is so hard to understand the response. In my opinion, that is the view down there in the street.

  35. AlexM says:


    Not sure what employment impropriety is, but regardless, it would be difficult to get to $75-200k a year doing part time work much less unemployment benefits.

  36. theexpertisin says:

    Defining what is “middle class” can be a daunting exercise. How about this snippet…..

    One car under three years old. A second car of questionable reliability.
    A residence with separate bedrooms for all persons over twelve years of age.
    Central air.
    Forced air gas heat.
    Two or more “HD” media centers.
    Two computers with internet (high speed).
    One cell phone for each adult.
    Residence up to code and secure.
    Appliances in good working order for cooling, refrigeration and washing/drying.
    A dishwasher for cleaning dishes.
    Clothing in style.
    Plenty of food, liquor and cigs.
    Free public educations.

    Ladies and Gentlemen, I proudly introduce my typical Section 8 Housing client!

  37. kaleberg says:

    Sounds like good news for the stock market, but bad for the economy. If people had money to spend, it would be worth buying a box of tee shirts or building a house and selling it, but with everyone rightly worried about their job, there are no investment opportunities. That means the money the top 1% have been racking up for the last decade has to go somewhere, so the market it will be.

  38. Julia Chestnut says:

    Holy Crap, @ theexpertisin, I wouldn’t qualify! My newer car is 8 years old, my older one is from 1999. I can fix both, so that’s not as dire as it sounds. ;) We’re also not big on TV. We got one HD TV a month ago – it replaced our 10 year old set, and it’s the only one in the house. You also forgot the wii/xbox/playstation. Gotta have one of those, dude.

    “Middle class” has social and cultural implications, not just a lifestyle. I’d describe the middle class more in terms of their aspirations than their trappings. What makes the middle class the backbone of a country and its economic system is their support for the status quo — their belief that their children can move up the ladder from where they are with the right foundation and investments in their future under the game as currently constructed. These are the rats in the maze who keep persistently working their way around looking for the cheese, even if their isn’t any.

    There are, under that theory, two aspects to the destruction of the middle class of their lifestyle – which has undoubtedly occurred, at least I’m completely convinced of it based on everything I have seen over the past 20 years. The second (and difficult to quantify) part is that critical lack of faith: once you stop believing that your children can move up the ladder from where you are, the incentive to bust your @$$ to play by the rules is just dissipated.

    Now that’s what you’ve got to worry about. And no amount of arguing that people still have wifi is going to fix that. Just another perspective.

  39. NeutralObserver says:

    @deanscamaro – I agree with all that you wrote. Further, the real indicator to watch on employment is the employment-population-ratio, which hasn’t been this low (58.2%) since August 1983 – see http://data.bls.gov/timeseries/LNS12300000

    People have seen all the easy cuts made already and, after nearly 5 years of this, they are far up the learning curve or knowing when layoffs are on the agenda. By now they know that whole units can be closed down and everyone is vulnerable. When layoffs arrive at your company, it is rarely news to the employees as they have known about it for some time and are just waiting for the list to see if they are on it this time. My vote is for “negative for the economy” and “negative for politicians”. People who are afraid they might be unemployed for a long time don’t go out an blow a lot of money on non-necessities. Good in the long run though. After fear comes anger and more establishment politicians will be collecting unemployment after each election.

  40. Arequipa01 says:

    Here’s an interesting story from Poytner:

    Pulitzer-winning photojournalist resigns rather than lay off staff


    @expertisin: Ohh, the poor are too blame for everything meme. Genius, pure genius- are you Stanley Kurtz’s mouthpiece, you know, bucal companion? Gobble, gobble, Goebbels.

    Ayn Rand and Onanism is a bad mix. I don’t care that AEI talking points give you a chubby.

  41. bear_in_mind says:

    My take:

    1) Props to JuliaChestnut, AlaskanPete, deanscamaro, and NeutralObserver. I think you all nailed some of the more qualitative parts of the equation. Well done!

    2) The Gallup sample appears sufficiently large to draw some meaningful inferences, but they don’t link to the entire data sample or report. Grrrr….

    3) This poll was sub-categorized by household income, breaking respondents into three groups:
    “Less than $50K”, “$50-74.9K”, and “$75K or more.”

    “Less than $50K”
    This group’s fear of layoff is 39 percent, significantly higher than the overall sample. Their fear of hours being reduced was virtually identical. Maybe most notable, almost a fifth (18 percent) of this group expressed concern about their positions being sent offshore — which is almost 4x the level cited by the next income group.

    This group’s fear of layoff and reduction in hours were at 32/33 percent, respectively.

    “$75K or more”
    This group was relatively sanguine about layoff risk (18 percent), yet they were notably more concerned about wage reductions (28 percent) than the middle group.

    Also, approx. 43 percent of the survey participants are anticipating reductions in benefits. One would expect that if these reductions come to fruition, they’d most likely appear in the form of increased co-pays for health care (or elimination of benefit altogether). If so, this would act as a de facto tax increase that would hit those who retained employment. That’s a net winner for corporate profit margins, but a net loser for economic activity.

    4) Trying to put all these numbers into some perspective, the most recent US Census QuickFacts (2009) states the median household income is $50,221.

    5) Doug Short posted a nice report today (see elsewhere on TBP for the link) using Mean Household Income quintiles from the US Census. Doing my best apples-and-oranges guesstimate voodoo from the two reports, I think the first two groups in this Gallup poll reflects somewhere around 65 to 75 percent of the employed population. That’s a lot of worried folks, and I doubt they’ll be spending like drunken sailors anytime soon… no matter what the administration or stock market does.

    6) SUMMATION: As a measure of the stock market, I’d say it could be seen as a contrary indicator, since it may reflect corporate sentiment that “shareholders come first” and “The beatings will continue until morale improves.” But as a measure of the health of the economy, I’d say it’s time to batten the hatches. Cheers.