Mon, 10 August 2020 | inflation household finances
The Federal Reserve Bank of New York' reported household expectations regarding their employment prospects and their year-ahead financial situation slightly deteriorated in July after two months of gradual improvement. Other indicators, such as the expected growth in home price and in household income, remained steady at a considerably higher level than in March and April, but below their pre-COVID-19 levels. Median inflation expectations increased 0.2 points at the one-year and three-year horizons, respectively, while disagreement about future inflation also increased.
The Fed reported a slight increase in consumers' median inflation expectations for a one-year time horizon, increasing from 2.7% in June to 2.9% in July, above its 12 month trailing average of 2.5%.
Consumers continue to relatively pessimistic about their household finances with median expected household income growth remained steady at 2.1% in July for the second consecutive month, which is well below its 2019 average of 2.8%. One-year ahead expectations about households' financial situations deteriorated with more respondents expecting their financial situation to worsen and fewer expecting it to improve. Both perceptions and expectations of financial conditions remain weak compared to pre-COVID-19 readings.