The Federal Reserve Bank of New York’s Center for Microeconomic Data has released the August 2024 Survey of Consumer Expectations. The survey reveals that inflation expectations remained unchanged at short- and longer-term horizons, with a slight rebound at the medium-term horizon after a significant drop last month. Labor market expectations showed mixed but generally stable trends. Additionally, households expressed increased optimism regarding credit availability in the coming year, while delinquency expectations rose to their highest level since April 2020.
Key findings from the survey include:
Inflation
Median inflation expectations at one- and five-year horizons held steady in August at 3.0% and 2.8%, respectively. At the three-year horizon, median inflation expectations rose from 2.3% to 2.5%. The measure of disagreement among respondents widened across all three horizons.
Median inflation uncertainty remained unchanged at the one-year horizon but declined at three- and five-year horizons. Median home price growth expectations slightly increased to 3.1% from July's 3.0%.
Year-ahead expected price changes saw varied movements: gas prices rose by 0.1 percentage point to 3.6%, rent by 0.2 percentage point to 7.3%, and medical care by 0.4 percentage point to 8.0%. Conversely, food prices decreased by 0.3 percentage point to 4.4%, and college education costs fell by 1.3 percentage points to 5.9%.
Labor Market
Expected earnings growth for the next year increased to 2.9% from July's 2.7%, notably among households earning less than $50,000 annually.
Mean unemployment expectations—reflecting the probability that U.S unemployment will rise within a year—increased slightly from July's figure of 36.6% to August's 37.7%.
The perceived probability of job loss within the next year decreased by one percentage point to 13.3%, below its trailing average of 13.7%. Similarly, voluntary job departure probability fell to 19.1% from July's figure of 20.7%.
The likelihood of finding a new job if current employment was lost dipped slightly by two-tenths of a percentage point to stand at 52.3%.
Household Finance
Expected household income growth marginally increased by one-tenth of a percentage point to reach an even rate of around three percent over the past year.
Spending growth expectations edged up slightly, maintaining between November's range of approximately five percent.
Credit access perceptions improved compared to a year ago with fewer reporting tighter conditions; future credit access optimism also grew with more expecting easier conditions ahead.
The probability of missing minimum debt payments over the next three months climbed slightly for its third consecutive increase, now reaching its highest level since April four years ago.
Expectations for tax changes in current income levels declined marginally while anticipated government debt growth dropped fractionally.
Perceptions about interest rates on savings accounts improving within twelve months saw a slight increase in confidence.
Overall financial situation sentiment deteriorated slightly with fewer respondents feeling better off than last year and more anticipating worsening conditions ahead; however, there remains higher optimism compared to last year's outlooks.
Stock price projections stayed static with no change reported in expected increases over twelve months.
About the Survey
The SCE provides insights into consumer perspectives on inflation rates for essential goods such as food, gas housing as well as education costs alongside job prospects and earnings outlooks coupled with spending tendencies plus credit accessibility views inclusive uncertainties regarding economic projections available categorized demographically through variables like age geography income education numeracy sampled nationally involving roughly thirteen hundred household heads engaged rotationally monthly enabling longitudinal observation compared conventional cross-sectional methodologies enabling comprehensive trend analysis further details methodology chart guides questionnaire accessible through designated contacts provided below
Connor Munsch (347)224-1175 Connor.Munsch@ny.frb.org
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