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posted on 13 July 2015

Consumers Expectations June 2015 Shows Cautious Optimism about the U.S. Economic Outlook

from the New York Fed

The results from the June 2015 Survey of Consumer Expectations generally show a slightly more positive outlook of the U.S. economy. Median consumer inflation expectations at both the short and medium term horizon continue to be stable. Home price change expectations rose to 3.5 percent, their highest level this year. Median earnings growth as well as household spending growth expectations increased from the prior month. Labor market expectations (such as voluntary quits and likelihood of finding a job) also continued to improve. Credit availability expectations were largely unchanged.

Other findings from the survey include [you can access the data here]:


  • Median inflation expectations at the one-year horizon were 3 percent, essentially unchanged from the previous month. Longer-term (three-year ahead) inflation expectations also remained unchanged at 3 percent. There was a notable decline in the median individual-level uncertainty at both horizons: median inflation uncertainty at the one-year horizon, for example, declined from 3 percent in May to 2.6 percent, the lowest reading since the start of the series in June 2013. This suggests that consumers are becoming relatively more certain about their outlook of inflation at both horizons.
  • Median home price change expectations rose from 3.3 percent in May 2015 to 3.5 percent, its highest reading this year, but still below the 2014 average of 3.8 percent. The rise in median home price expectations was driven primarily by respondents residing in the South. Median home price uncertainty also declined, from 3.6 percent in May to 3.1 percent. That is its lowest reading since the survey's inception.
  • Median one-year ahead gasoline price change expectations were 5.4 percent, lower than the 5.8 percent reading in May this year, but still above the 2014 average of 4.5 percent. Expectations for changes in medical care costs and the cost of college education increased from May, in part reversing the decline observed in the previous month.

Labor Market

  • Median earnings growth expectations rose from 2.3 percent in May to 2.5 percent, their second highest reading this year. There was a notable increase in the 75th percentile of the cross-sectional distribution, which increased to 4.9 percent from 4.3 percent in May, back to its level in April 2015. The increase in earnings growth expectations was prevalent across all demographic (age; education; income) groups, but especially notable for lower education and lower income workers.
  • The mean perceived probability of losing one's job rose slightly from the series low of 13.8 percent in May to 14.0 percent, its second-lowest level since July 2013. The mean perceived probability of leaving one's job voluntarily rose from 20.3 percent in May to 21 percent.
  • The mean perceived probability of finding a job in the next three months (conditional on losing one's job today) jumped to 55.6 percent, nearly as high as the series high of 55.7 percent reached in March this year.

Household Finance

  • Median household income growth expectations remained steady at 2.9 percent, with an increase for younger household heads but a decline for household heads in the 40-60 age range. Median household spending expectations rose from 4.0 percent in May 2015 to 4.3 percent, their second-highest reading this year, but still below the 2014 average of 4.7 percent. Median spending expectations rose for all age and income groups.
  • Perceived change in credit availability compared to a year ago was largely unchanged from the previous month. Year-ahead expected credit availability continues to improve: the proportion of consumers who expected credit availability to be much or somewhat harder a year from now compared to today has gradually declined from 33 percent in January this year to 28.2 percent.

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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