The Center for Microeconomic Data at the Federal Reserve Bank of New York has released its March 2024 Survey of Consumer Expectations, which suggests that U.S. consumers hold mixed expectations regarding inflation and the job market. The survey also indicates an increase in the number of Americans who anticipate being unable to meet debt payments.
According to a press release from the New York Fed, the survey results show that short-term inflation expectations have remained steady, while medium-term expectations have risen. Specifically, the median one-year ahead inflation expectations stayed at 3.0% in March, whereas the median three-year ahead inflation expectations rose from 2.7% to 2.9%. However, the data shows a decrease in longer-term expectations— with the median five-year ahead rate falling from 2.9% to 2.6%.
The press release further reveals that consumer outlooks on the labor market are varied. Expected earnings growth over the next year held steady at 2.8%, while mean unemployment expectations remained at 36.2%. The perceived probability of job loss over the next year increased by 1.2 percentage points, reaching a mean probability of 15.7%. Similarly, the mean probability of voluntarily leaving one's job within the next year rose by 1.1 percentage points to reach 20.6%.
The survey also demonstrated an increase in anticipated debt payment defaults over the next three months, according to the press release. The average perceived probability of missing a minimum debt payment rose to 12.9%, marking a 1.5 percentage point increase and reaching its highest level in four years or since the start of COVID-19 pandemic - particularly among respondents aged between 40 and 60 years old earning less than $50,000 annually.
Lastly, according to the press release, median expected growth in household income remained at 3.1% in March - still higher than February 2020's pre-pandemic level of 2.7%. Meanwhile, median household spending growth expectations fell by 0.2 percentage points to 5.0%, which is still above the February 2020 level of 3.1%.