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MNI POLICY: NY Fed Survey Shows Consumer Expectations Steady


U.S. consumer views of spending, household income and labor market expectations remained flat in August at weak levels relative to the pre-coronavirus period, according to the New York Federal Reserve's latest consumer survey.

Median household spending growth expectations remained steady at 3.0% in August, below its 2019 average of 3.2%.

The mean expectation that the U.S. unemployment rate will be higher in a year dipped slightly in August to 39.1% after rising in July to 39.3%. The series high of 50.9% was reached in March.

The mean perceived probability of losing one's job in the next 12 months increased for the second consecutive month from 16.0% in July to 18.0% in August, well above its February reading of 13.8% and the 2019 average of 14.3%.
Median one-year ahead expected earnings growth remained flat at 2.0% in August, below its 2019 average level of 2.3%. Median expected household income growth increased to 2.2% in August from 2.1% in July, remaining well below its 2019 average of 2.8%. The increase was driven mostly by respondents below the age of 40.


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 to 3.0% from 2.9% in July. This new reading was above its August 2019 reading of 2.5%.

At the three-year horizon median inflation expectations similarly increased to 3.0% from 2.7%. At both time horizons the increase was driven by respondents below age 40.

Median inflation uncertainty, or the uncertainty expressed regarding future inflation outcomes, increased for the second consecutive month at both horizons and remains elevated relative to pre-coronavirus readings.


The Internet-based survey with a rotating panel of 1,300 households also showed the average probability of missing a future minimum debt payment increased slightly to 9.7% in August from last month series low of 9.5%. This new reading remains well below its 2019 average of 11.5%.

Perceptions about households' current financial situations compared to a year ago improved slightly, with more respondents reporting being better off. Similarly, one-year ahead expectations about households' financial situations also improved with more respondents expecting their financial situation to improve.

MNI Washington Bureau | +1 202-371-2121 |
MNI Washington Bureau | +1 202-371-2121 |

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