Employees are becoming less confident about their businesses' outlooks as the United States economy faces potential challenges, including inflation risks, economic slowdown, and global instability.

What Happened: Glassdoor released its Employee Confidence Index in February, surveying American employees' sentiment. Confidence dipped to 44.4%, the lowest reading since the measure began in 2016.

Employees are reportedly worried about layoffs at their companies. They are also more concerned about inflation and the risk of a recession than they were a few months ago.

Confidence is lowest in the public sector, as government employees feel the weight of Elon Musk's Department of Government Efficiency's changes to several government agencies. Just 38.1% of employees are confident in their jobs, down from 45.5% a year ago.

Retail and food service employees also reported apprehensions in February, with confidence at 38.3% and 38.1%, respectively.

Meanwhile, other employee surveys paint an even starker picture. Employment expectations for a higher unemployment rate shot up to 2008 levels, according to the report.

A recent consumer survey reveals that the percentage of Americans expecting a higher unemployment rate over the next year has surged to over 60% - above the peak reached during the COVID-19 outbreak in 2020, and the highest level since 2008. Meanwhile, despite their dim view

Why it Matters: Fear surged into the economy in the first few months of the year. Sentiment could be tied to President Donald Trump's tariff insinuations, an economy that was already struggling by some metrics and persistently high interest rates. Uncertainty about future Federal Reserve policy and corporate earnings outlooks could further weigh on confidence.

Investors in the stock market aren't confident either. Just 21.6% are bullish as of March 19, compared to the 58.1% with negative outlooks on markets according to the AAII Investor Sentiment Survey.