MNI POLICY: NY Fed Survey: Consumer Expectations Tick Up

By Evan Ryser

     WASHINGTON (MNI) - U.S. consumer views of job security showed small signs

of improvement in May compared to April lows as perceptions of income and

spending ticked up in the New York Federal Reserve's latest consumer survey.

     Consumers grew comparatively more optimistic about labor market outcomes

with earnings growth, job finding, and job loss expectations all slightly

improving, but remaining far off pre-COVID19 levels. 

     Consumer views of losing one's job in the next 12 months declined to 18.7%

in May from 20.9% in April, but remained well above its 12-month trailing

average of 15.2%, and expected earnings growth increased to 2.0% in May from

1.8% in April, according to the survey. 

     Unemployment expectations for one year from fell to 38.9% in May, from

47.6% in April and 50.9% in March, a broad-based decline across age, education,

and income groups, the survey showed.

     The internet-based survey with a rotating panel of 1,300 households also

showed increased household income growth and increased expectations of spending

growth. 

     The perceived probability of missing debt payments over the next three

months also declined sharply to 12.6% from 16.2%. 

     -- CREDIT

     On the other hand, perceived and expected availability of credit continued

to worsen, the survey showed. 

     Consumer perception of credit access compared to a year ago deteriorated

for the third consecutive month, with 49.6% of respondents reporting credit to

be harder to get today than a year ago, versus 32.1% in March and 48.0% in

April. 

     Expectations for year-ahead credit availability also worsened, with fewer

respondents expecting credit will become easier to obtain.

     --INFLATION

     The survey of consumer expectations, one of the Fed's price gauges as it

weighs interest rates policy, showed median inflation expectations at the

one-year horizon increased by 0.4 percentage point to 3.0% in May. Median

three-year ahead inflation expectations remained unchanged at 2.6%.  

     Median inflation uncertainty-or the uncertainty expressed regarding future

inflation outcomes-increased at the one-year horizon, to a new series' high.

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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