Credit availability expectations declined somewhat to start the year, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations. Consumers’ household income growth expectations also declined slightly from December to January, according to the report.
“The perceived change in credit availability compared to a year ago and the year-ahead expected credit availability both deteriorated somewhat in January,” the Fed reports in a news release.
When asked if obtaining credit will be “much easier, somewhat easier, equally easy/hard, somewhat harder” or “much harder” a year from now, 2.18 percent said it will be much easier, compared to 2.79 percent who provided that response in December, according to the survey.
Just over 7 percent (7.17 percent) of respondents said obtaining credit would be “much harder” a year from now, compared to 5.05 percent who provided that response in December.
When asked if obtaining credit is “much easier, somewhat easier, equally easy/hard, somewhat harder” or “much harder” than a year ago, 2.69 percent said it was much easier in January, compared to 2.37 percent in December.
The Fed also reports that consumers’ average perceived probability of missing a minimum debt payment over the next three months increased from 14.3 percent in December to 14.9 percent in January. The January result matches the three-year high percentage for missing a minimum debt payment reached in November 2016, according to the Fed.
Household Spending and Income Expectations
The Fed also reports slight declines in consumers’ median expected household income growth and spending growth expectations.
For the year ahead, consumers’ expected household income growth declined from approximately 2.8 percent in December to 2.6 percent in January.
“Median household spending growth expectations dropped sharply from 3.7 percent in December to 3.1 percent in January, back to its level in October 2016,” the Fed reports in the news release. “This series has been volatile, but the current reading is below its 2016 average of 3.5 percent. The decrease was broad-based across education and income groups.”
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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