Tue, 11 March 2025 | consumers economy
The Federal Reserve Bank of New York’s latest Survey of Consumer Expectations revealed a mixed economic outlook among U.S. households. While medium- and longer-term inflation expectations remain steady, consumers are increasingly pessimistic about their financial futures. Short-term inflation expectations rose slightly to 3.1%, but three- and five-year projections stayed at 3.0%, reflecting some optimism about price stability over time. However, this stability is overshadowed by mounting concern across job markets, credit access, and household finances.
Expectations for commodity prices such as gas, food, medical care, and rent all increased, hinting at consumers’ anticipation of cost-of-living pressures. In contrast, wage growth expectations stagnated, while the perceived probability of job loss remained steady—yet more Americans now feel it will be harder to find new employment if they were to lose their jobs.
Perhaps most notably, financial confidence is slipping. More households expect their financial situation to worsen in the year ahead, marking the highest level of pessimism since November 2023. Credit access perceptions also declined, with nearly half expecting it to be harder to get credit in the next year. Delinquency risks are up too, particularly among younger adults and those without college degrees.
Despite the gloomy outlook, spending growth expectations increased, indicating that households may still be bracing for higher living costs regardless of income growth.