A recent Federal Reserve study finds that consumers are increasingly worried about job security, debt and rising inflation.
04/16/2024 12:25 P.M.
1.5 minute read
As the economic landscape continues to shift, consumers find themselves at the crossroads of financial uncertainty. The latest insights from the Federal Reserve Bank of New York’s March Survey of Consumer Expectations sheds light on consumer concerns regarding debt, job security and inflation.
Here are key findings from the survey.
In terms of inflation, consumers maintain a consistent outlook for the next year, with median expectations for change holding firm at 3%. However, projections for three years ahead have seen a notable uptick, reaching 2.9% from February’s 2.7%.
Conversely, expectations for five years out have decreased to 2.6% from 2.9%, indicating a mixed sentiment about the long-term trajectory of prices. Notably, the survey highlights rising costs for essential goods, with anticipated price increases for gas, food and rent amplifying the financial strain on households.
Amidst these economic shifts, concerns about job security have escalated. The survey reports a notable increase in the perceived probability of job loss over the next 12 months, surpassing pre-pandemic levels.
“The mean perceived probability of losing one’s job in the next 12 months increased by 1.2 percentage point to 15.7%. This is above pre-pandemic levels and the highest reading since September 2020,” the Fed reported.
This apprehension is compounded by stagnant growth in household income coupled with declining expectations for spending. While median expected income growth remains unchanged at 3.1%, spending growth expectations have dipped to 5.0%, signaling potential financial strain as expenses outpace earnings.
One of the most concerning trends highlighted by the survey is the growing apprehension surrounding debt. Consumers express heightened worries about their ability to meet minimum debt payments, with the average perceived probability of missing payments reaching its highest level in four years. This trend is particularly pronounced among respondents aged 40 to 60 and those with incomes below $50,000, underscoring the breadth of financial anxiety across demographic groups.
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