The Conference Board released its July consumer confidence survey results on the 28th (local time), showing the US labor market differential—a leading indicator of unemployment—declined to 3.1 percentage points from 3.8 percentage points the previous month, marking the third consecutive monthly decline. The proportion of respondents saying 'jobs are plentiful' fell 0.9 percentage points to 24.6%, while those finding 'jobs are hard to get' decreased 0.2 percentage points to 21.5%. The July figure represents the lowest labor market differential since February 2021 (1.4 percentage points), occurring amid what experts describe as a 'low fire, low hire' labor market environment where job seekers face increasing difficulty while existing workers experience minimal layoff risk.
Labor Market Differential Reaches Lowest Level Since February 2021
The Conference Board's July consumer confidence survey showed the labor market differential—the spread between respondents finding jobs plentiful versus difficult to obtain—declined to 3.1 percentage points. This figure dropped from 3.8 percentage points the previous month and marks the third consecutive monthly decline. The July reading represents the lowest level recorded since February 2021, when the differential stood at 1.4 percentage points.
![Labor Market Differential Chart]()
Data source: Conference Board, US Department of Labor
In the July survey, 24.6% of respondents reported jobs as plentiful, down 0.9 percentage points from the previous month. Meanwhile, 21.5% said jobs are hard to get, declining 0.2 percentage points. Economists monitor the labor market differential closely due to its traditional negative correlation with the unemployment rate—when the differential rises, unemployment typically falls, and vice versa.
Unemployment Rate and Labor Market Dynamics
Despite the declining labor market differential, the US unemployment rate has remained relatively stable. In June, the unemployment rate stood at 4.2%, down 0.1 percentage points from the previous month. This divergence from historical patterns reflects the current 'low fire, low hire' state of the labor market, where the traditional relationship between the differential and unemployment rate has weakened.
Experts explain that the deteriorating labor market perception represents difficulties faced by new labor market entrants and those seeking reemployment opportunities, rather than indicating increased layoff risk for currently employed workers.
Initial Unemployment Claims Hit 57-Year Low
Initial unemployment claims data released last week showed 187,000 seasonally adjusted claims for the week ending the 18th. This figure represents the lowest level recorded since September 1969, approximately 57 years ago. The claims data indicates minimal layoff activity has occurred in the US labor market, even following the outbreak of the Iran war, contrary to some concerns.
![Initial Unemployment Claims Chart]()
Data source: US Department of Labor
The historically low unemployment claims figure reinforces the 'low fire' aspect of the current labor market environment, where existing workers face minimal termination risk while job seekers encounter increased difficulty finding new positions.
FAQ
What is the US labor market differential and why does it matter?
The labor market differential is the spread between the percentage of survey respondents who say jobs are plentiful and those who say jobs are hard to get. The Conference Board reported this differential declined to 3.1 percentage points in July from 3.8 percentage points the previous month. Economists monitor this metric because it traditionally shows a negative correlation with the unemployment rate and can serve as a leading indicator of labor market conditions.
How low are current US unemployment insurance claims?
Initial unemployment claims for the week ending the 18th reached 187,000 on a seasonally adjusted basis, according to data released last week by the US Department of Labor. This represents the lowest level recorded since September 1969, approximately 57 years ago, indicating minimal layoff activity despite recent economic uncertainties including the Iran war outbreak.
