Consumers’ Perceptions of Debt Payments, Credit Availability Improve


4/20/2017 2:00:00 PM

The Federal Reserve Bank of New York’s Survey of Consumer Expectations for March continues to show a higher probability that minimum debt payments will be made during the next three months.

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Consumers’ outlook on making minimum debt payments continued to improve in March, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations.

Their average perceived probability of missing a minimum debt payment over the next three months declined from 12.1 percent in February to 11.2 percent in March, the lowest reading since September 2015, according to a news release from the Fed.

Consumers’ average perceived probability of missing a minimum debt payment over the next three months increased from 14.3 percent in December 2016 to 14.9 percent in January before declining to 12.1 percent in February, ACA International previously reported.

In March, “the decline was broad-based across age, income and education groups,” the Fed reports.

The March 2017 survey also shows minimal changes in consumers’ expectations on credit availability compared to a year ago and for the coming year.

When asked if obtaining credit is equally easy/hard than a year ago, 18.59 percent of respondents said it was somewhat easier compared to 16.30 percent who provided that response in March; and 2.58 percent said it was much easier, compared to 2.34 percent who provided that response in February.

When asked if obtaining credit will be equally easy/hard a year from now, 44.73 percent of respondents said access to credit would be the same, compared to 46.87 percent who provided that response in February.

Household Spending and Income Expectations

The Fed also reports a decline in consumers’ median expected household income growth and spending growth expectations.

For the year ahead, consumers’ expected household income growth declined from 2.8 percent in February to 2.5 percent in March

“The decline was driven by younger (under 40) and middle-income (between $50,000 and $100,000) respondents,” the Fed reports.

However, respondents’ median household spending growth expectations increased from 3.2 percent in February to 3.3 percent in March, according to the Fed.

The Survey of Consumer Expectations is based on consumers’ expectations for overall inflation and how they expect prices for food, gas, housing and education to behave. It also shows consumers’ views on job prospects, earnings growth, and their expectations about future spending and access to credit.

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