Inflation expectations fell and consumers expect to spend less, according to the Survey of Consumer Expectations, released by the Federal Reserve Bank of New York on Monday.
“[H]ousehold inflation expectations declined at the one-year ahead horizon and dropped noticeably at the three-year ahead horizon,” the survey noted.
“The outlook of consumers in several other dimensions showed few signs of optimism — spending growth expectations remained at their series low and perceived current and expected future financial situations worsened from the previous month,” the survey said.
Median inflation expectations slid to 2.6% from 2.8% for a one-year period and fell to 2.5% from 2.9% for a three-year horizon.
Turning to labor, the expected earnings for one-year declined to 2.2% from 2.5%. The mean perceived probability of losing one’s job in the next 12 months grew to 13.6% from 13.2%, while the chances of voluntarily leaving a job slipped to 19.4% from 19.9%. The probability of finding a job, if one lost his/her current job) crept to 56.7% from 56.5%.
Median one-year ahead home prices are expected to grow 3.5%, up from 3.4% last month, the Fed said.
Median household spending expectations held at 2.6%, the lowest since the survey began in June 2013. Income growth expectations decreased to 2.7% from 2.8% the prior month.