Americans have a bleak outlook about their financial futures, new Federal Reserve data shows.
The latest edition of the Federal Reserve Bank of New York’s Survey of Consumer Expectations, released Thursday (May 8), showed that households had lowered their expectations for both wage growth and finding employment.
“Households also expect lower income growth over the next year, and their perceptions about both their current financial situation and their outlook for their financial situation one year from now deteriorated sharply,” the bank said in a news release.
The survey was fielded during April, the same month that the White House imposed sweeping tariffs on countries around the world, leading to downturns in consumer spending.
According to the survey, Americans’ median inflation expectations remained unchanged at the one-year-ahead horizon at 3.6% and rose by 0.2 percentage point at the three-year-ahead horizon to 3.2%, the highest reading since July 2022.
By contrast, median inflation expectations fell by 0.2 percentage point at the five-year-ahead horizon to 2.7%. Median inflation uncertainty — the uncertainty about future inflation outcomes — climbed at the one, three and five-year marks.
Meanwhile, the median expected growth in household income dropped to 2.6%, a 0.2 percentage point dip, and the lowest reading in four years. However, consumer perceptions about credit access improved compared to a year ago, with the net share of households who say it is easier to get credit increasing.
The findings come weeks after The Conference Board released its Consumer Confidence Index survey, showing consumer confidence falling for the fifth consecutive month in April, with consumers expressing rising concerns about tariffs’ effects on prices and the economy. The board noted that mentions of tariffs in consumers’ write-in responses were at a record high.
Additional research from PYMNTS Intelligence, from the report “Navigating the Shifting Sands of Consumer Spending Amid Rising Prices and New Tariffs,” shows that more than 50 million consumers would shift their spending or freeze spending on certain categories, if price tags increase by 10% or more.
“The pressures are widespread, given the fact that the data show that 65% of U.S. adults live paycheck to paycheck,” PYMNTS wrote recently. “A significant 22% of consumers find it a struggle to meet their monthly obligations, which means that even keeping the fridge full or the pantry stocked is no easy task.”
