Fed Survey: Consumers’ Pessimism About Household Finances, Credit Continues

10/11/2017 1:46 PM

The September Survey of Consumer Expectations shows a significant decline in household income expectations compared to August.


Consumers’ expectations for spending and income growth, financial stability and credit availability all deteriorated in September, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations results released Oct. 10.

The findings show “increased pessimism” among consumers, according to the Fed.

Among the findings, respondents’ outlook on their household financial situation worsened compared to a year ago as well as for a year from now.

“The proportion of respondents who perceive being better off financially compared to a year ago declined from 32.6 percent in August to 32.3 percent, while the proportion of respondents who expect being better off financially a year from now declined from 42.3 percent in August to 40.3 percent,” according to a news release from the Fed.

At the same time, consumers’ median one-year ahead earnings growth expectations declined significantly from 2.7 percent in August to 2.2 percent in September, the lowest response recorded since February 2014 and well below the survey high of 3 percent reached in July 2017, according to the news release.

Consumers’ median spending growth expectations fluctuated in recent months; but declined from 3 percent in August to 2.7 percent in September.

The Fed also reports both the perceived change in credit availability compared to a year ago and year-ahead expected credit availability deteriorated slightly in September.

Consumers’ average perceived probability of missing a minimum debt payment over the next three months increased for the third consecutive month. It increased from 12.85 percent in August to 13.39 percent in September; compared to just over 12 percent in June and July.

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.

The full survey results are available on the Fed’s website.

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