Consumers took a slightly brighter view of the economy in October in a PYMNTS Intelligence survey, while New York Fed respondents saw a greater chance of missing a minimum debt payment in the next three months.
The Federal Reserve Bank of New York’s October Survey of Consumer Expectations, released Monday (Nov. 9), put median expected household spending growth over the next year at 5.3%, down from 5.5% in September but still above its 12-month average of 5%. Expected household income growth slipped from 3.1% to 3%. The spending measure tracks dollars, so part of the increase households expect to spend could go toward paying higher prices for the same purchases.
The improvement in sentiment came largely from views about business and buying conditions. The PYMNTS Consumer Expectations Index edged up to 54.2 from 54.1, while its measure of the broader economy and buying climate rose 1.8 points to 46.8 as we measured last month, still below the neutral reading of 50. The largest gains in short-term business and buying conditions came from consumers living paycheck to paycheck and struggling with bills, although that group still rated both conditions lowest. Meanwhile, expectations for household finances a year out were roughly unchanged in the Fed survey.
October brought some relief in the outlook for gasoline, as measured by the central bank. Consumers expected gas prices to rise 4.2% over the next year, down from 4.8% in September. They still expected food prices to rise 5.5%, and expected rent increases climbed from 6.8% to 7.7%. Median expectations for overall inflation held at 3.9% one year out, 3.3% three years out and 3% five years out. For renters drawing up a holiday budget, the change in the rent outlook gives them a reason to be more guarded about spending even as the broader inflation reading holds steady.
Job Worries Reach Households Still Paying Their Bills
Respondents put the average probability that national unemployment would be higher in a year at 45.3%, the highest since April 2020. Consumers without a college degree accounted for the increase. The perceived chance of losing one’s own job also rose, to 13.9% over the next 12 months, below the 12-month trailing average of 14.3%. At the same time, respondents put the odds of finding another job if they lost their current one at 46.5%, the highest since November 2025.
The separate PYMNTS Intelligence survey showed how those worries were already affecting borrowing decisions. Among consumers living paycheck to paycheck who were keeping up with bills, 30.7% considered job loss at least somewhat likely, up from 20.7% in September. From August to October, the share of that group who said they had accelerated debt payments or avoided taking on new debt because of job or income worries rose from 15.2% to 21.2%.
That puts the Fed’s credit findings in context. Consumers reported little change in how easy they thought it was to get credit or how available it would be in a year. Yet their average estimate of the chance of missing a minimum debt payment within three months rose from 12.2% to 13.8%. A household with room on a card can still decide against adding a purchase that will come due in January.
What a Holiday Discount Can Change
October’s buying figures give retailers some indication of where a promotion might work. Among consumers who traded down, delayed or canceled a major purchase, 34.9% cited high prices as their main reason. Another 17.6% were waiting for a better deal or better timing. Waiting was more common among those who held back and lived outside the paycheck-to-paycheck economy than among those struggling to pay bills, at 22.2% versus 13.5%.
As Black Friday approaches, that difference helps frame what merchants should look for in sales. A discount could bring forward a planned purchase for shoppers who were waiting. For households preserving room for groceries, rent or a card payment, the more relevant choice may be a lower-priced gift or one fewer item in the cart. Sales dollars will capture either decision. The number of items shoppers buy and the prices they pay will show which choice they made.
