**Cooling Labor Market Sparks Shifts in Consumer Confidence**

Consumers are starting to feel the effects of a cooling labor market. The latest Consumer Confidence Index shows a shrinking gap between those who find jobs "plentiful" and those who find jobs "hard to get." Stephanie Guichard, senior economist at The Conference Board, explained to Yahoo Finance that it's not surprising workers are less confident, given the recent rise in unemployment and the decline in job openings. Guichard emphasized this change reflects a shift from an overheated labor market to one that remains strong, historically speaking.

Recent data underscores this cooling trend. The unemployment rate has gradually increased throughout 2024, reaching 4.2%, its highest in nearly three years. Job growth has slowed as well, with July and August marking two of the lowest periods for job additions this year. Job openings in July fell to their lowest levels since January 2021, and the phenomenon of "quiet quitting" appears to have become less common, marking a significant shift from the era of the "Great Resignation."

Guy Berger, director of economic research at The Burning Glass Institute, noted the declining number of quits indicates workers' apprehension about the labor market. "It's the realization that if they leave their job, it's going to be hard to find a new one," Berger said. Despite the slowdown, Federal Reserve Chair Jerome Powell maintains confidence in the labor market's solid condition, citing a strong economy, declining inflation, and steady labor market performance as reasons for optimism.

While some economists observe signs of deterioration, they caution that the current state isn't dire. Berger pointed out the slow, ongoing change from a "super hot" job market to one that is merely strong, underscoring that no critical labor market data looks "really bad." The Fed's current interest rate cuts aim to ease the slowdown and stave off a recession, reflecting their strategy for achieving a "soft landing."

Interestingly, new data indicates weekly unemployment claims hit a four-month low for the week ending September 21. Wells Fargo economist Shannon Seery Grein highlighted the risk of widespread layoffs as a significant threat to the U.S. economy. However, she noted that current conditions don't suggest an imminent wave of layoffs, suggesting businesses are not yet at the point of shedding workers despite the stall in economic momentum.