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posted on 11 May 2015

Consumers Expectations Little Changed in April 2015 Except Median Household Spending Growth At Series Low

from the New York Fed

The results from the April 2015 Survey of Consumer Expectations indicate that one-year ahead inflation expectations fell while three-year ahead inflation expectation increased slightly. The median one-year and three-year ahead expected rates of inflation now stand at 2.7 percent and 3.0 percent, respectively. While earnings and household income growth expectations were largely unchanged, median household spending growth expectations retreated substantially to the series low reached in February 2015.

Other findings from the April 2015 Survey include:


  • The median one-year ahead expected rate of inflation fell from 2.9 percent to 2.7 percent, a new series low, while the median three-year ahead expected rate of inflation increased slightly from 2.9 percent to 3.0 percent.
  • The median one-year ahead house price inflation expectation remained stable at 3.4 percent. At a regional level, the median expected house price inflation fell by 0.3 percentage points in the West and Midwest, while it increased by 0.5 and 0.2 percentage points in the South and North East, respectively.
  • Median expectations about one-year ahead gasoline price changes declined by 0.3 percentage points to 5.7 percent. Food and rent inflation expectations increased slightly.

Labor Market

  • After a strong increase in March, the median one-year ahead earnings growth expectation decreased marginally from 2.6 percent to 2.5 percent, remaining at the high end of the range observed since the start of the series. There was considerable heterogeneity across age groups, with the median earnings growth expectation increasing slightly for those under age 40, and falling for those older than 40.
  • Job separation expectations decreased moderately. The average perceived probability of leaving one's job voluntarily decreased by 0.8 percentage points to 20.7 percent, while the average perceived probability of losing one's job decreased by 0.2 percentage points to 14.8 percent.
  • The mean probability of finding a job in the next three months (conditional on losing one's job today) decreased slightly to 54.4 percent, but remained at the high end of the range observed since the inception of the survey in June 2013.

Household Finance

  • The median one-year ahead household income growth expectation decreased slightly to 2.8 percent, remaining close to the series' high attained in March.
  • After a marked rebound last month, one-year ahead household spending expectations dropped sharply, returning to the February level of 3.8 percent, tying a series low. The 25th percentile of expected spending growth dropped to 0.8 percent. The decline in expected spending growth was widespread, but strongest among lower-income and lower-educated respondents.
  • Expected (and perceived) change in credit availability a year from now or compared to a year ago remained essentially unchanged compared to the previous month. The average probability of missing a minimum debt payment over the next three months decreased by 0.3 percentage points to 12.0 percent, maintaining its overall declining trend.

About the Survey of Consumer Expectations

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing and education to behave. It also provides insight into Americans' views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty in expectations for the main outcomes of interest. Expectations are also available by age, geography, income, education and numeracy.

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,200 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel allows us to observe the changes in expectations and behavior of the same individuals over time.

The survey is conducted on our behalf by The Demand Institute, a non-profit organization jointly operated by The Conference Board and Nielsen.

About the SCE Credit Access Survey

The SCE Credit Access Survey, fielded as part of the SCE (Survey of Consumer Expectations), provides information on consumers' experiences and expectations regarding credit demand and credit access. Every four months, SCE panelists are asked whether they applied for credit in the past 12 months, and the resulting outcomes. They are also asked about their expectations of applying for credit over the next twelve months, and the perceived likelihood of those applications being accepted. We collect this information for five specific credit products: auto loans, credit cards, credit card limit increases, mortgages, and mortgage refinancing. Survey findings (in instances with sufficient sample sizes) are also presented separately by age and self-reported credit score subgroups.

A full set of interactive charts detailing the monthly SCE Credit Access Survey findings can be found here.

More information about the SCE survey goals, design, and content can be found here.

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