Americans polled in the latest “Survey of Consumer Expectations” from the New York Federal Reserve Bank are not looking to splurge on much in the coming year.
The survey results, which were announced today by the Federal Reserve, showed a significant drop in the median household spending growth expectations to the lowest level seen in recent years.
“One-year ahead household spending growth expectations decreased sharply from 4.3 percent to 3.5 percent, reaching their lowest level since the inception of the survey in June 2013,” the New York Federal Reserve Bank said in a press release. “The drop seems to be more pronounced for respondents over 40 and for respondents with lower education.”
The “Survey of Consumer Expectations,” which gathers responses from roughly 1,200 Americans on a 12-month rotating basis, provides insight into consumers’ expectations on topics such as job forecasts, earnings growth, access to credit and future spending.
The survey also contains information related to the behaviors of overall inflation and how the prices for food, gas, housing and education are predicted to behave.
When it comes to household finance, the July 2015 results also showed a 0.15 percentage point decrease in the forward-looking expectations for household income growth, reducing to 2.7 percent.
The perceived availability of credit showed little change from what was reported a year ago, but remains somewhat pessimistic looking forward. The number of respondents expecting credit to be more difficult to obtain in a year rose nearly 4 percent to 32 percent.
Earlier this year, the Federal Reserve reported expectations for strong hiring and consumer spending, but it seems as the year has progressed consumer sentiment has changed.
The Fed’s earlier survey, which took into account activity from the start of the year through Feb. 23, cited wage increase as a good indication toward stronger consumer spending, and it said price tags on goods and services remained relatively flat.
“The underlying strength that has kept confidence at high levels has been job gains. While buffeted by harsh weather and lower gas prices, consumers have remained focused on gains in jobs and wages,” Richard Curtin, chief economist of The University of Michigan’s surveys, said in the University of Michigan’s “Surveys Of Consumers” news release in February.
But the latest survey shows consumers’ expectations surrounding the potential to find a job or earn more money over the coming year have decreased.
The perceived probability of respondents finding a job within the next three months fell to 54.5 percent, while the potential earnings growth expectations also took a hit, decreasing slightly to 2.4 percent.