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According to a new report released Monday by the Federal Reserve Bank of New York, U.S. consumers Inflation mitigationHowever, concerns have grown about the labour market and managing household debt burdens.
of New York Fed According to the latest Consumer Expectations Survey, respondents continue to expect inflation to be 3% one year from now and 2.8% five years from now, unchanged from the previous month. Consumers' price expectations over the next 12 months showed that gasoline, rent and medical costs will increase more, while food and college costs will increase less.
The survey also found that the percentage of respondents who expect to default on a debt payment in the next three months has increased for a third consecutive month, rising 0.3 percentage points in August to 13.6%, the highest level since the early stages of the COVID-19 pandemic in April 2020.
The report found that consumers have mixed views of the labor market, with fewer fears about losing their job but also less optimism about leaving their current job voluntarily or looking for a new one after losing their current position.
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A New York Fed survey found that consumers are increasingly worried they will default on their debt payments in the next three months. (Paola Chapdelaine, The Washington Post via Getty Images)
Individual Perceived Probability Losing a job The likelihood of voluntarily quitting a job in the next 12 months fell one percentage point to 13.3%, below the average of 13.7% over the past 12 months. The likelihood of quitting a job voluntarily also fell from 20.7% to 19.1%.
The report also found that the chances of finding a job if you become unemployed fell 0.2 percentage points to 52.3%, below the 12-month average of 53.9%.
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A New York Fed survey revealed that people are becoming more pessimistic about finding a new job after losing their old one. (Spencer Pratt/Getty Images)
Expectations for growth Household income Expected spending growth increased by 0.1 percentage point to 3.1%, while the spending growth forecast increased by the same amount to 5.0%.
The report comes ahead of the release of August inflation data on Wednesday, when the Labor Department will publish its latest Consumer Price Index (CPI) figures.
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Federal Reserve Chairman Jerome Powell recently suggested he believes the time has come to lower interest rates. (Roberto Schmidt/AFP/via Getty Images)
Markets will be closely watching the CPI reading to gauge how much the Federal Reserve will cut interest rates when it meets next week. The benchmark federal funds rate is currently in the 5.25% to 5.50% range, its highest level in 23 years. Analysts are debating whether the Fed should cut rates by 25 basis points or 50 basis points.
Federal Reserve Chairman Jerome Powell said:The time has come“We recommend lowering interest rates as there are signs of progress toward containing inflation.”
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July CPI This represents a 2.9% increase from a year ago, well below the 9.1% peak in June 2022 during this inflation cycle, but above the Fed's target rate of 2%.
