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posted on 14 September 2015

Consumers Expectations August 2015 Shows Inflation Expectations Decreased Slightly

from the New York Fed

The August 2015 Survey of Consumer Expectations results indicate that median inflation expectations decreased slightly at both the one-year ahead and the three-year ahead horizons. Median expected one-year ahead earnings growth remained stable at 2.4 percent, while both perceived layoff and job finding probabilities improved slightly. Median expected household income growth increased slightly but expected household spending growth remained flat at its series low.

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


  • Median inflation expectations declined slightly from 3.0 to 2.8 percent at the one-year ahead horizon, and from 3.0 to 2.9 percent at the three-year ahead horizon.
  • The median expected home price change also declined slightly to 3.0 percent, matching the previous series low recorded in February 2015. The decline was driven by younger, higher income and more educated respondents.
  • Year-ahead gas price change expectations declined from 4.4 to 3.2 percent, returning to the low levels observed in fall 2014 and suggesting that respondents see current low prices as more permanent. Price change expectations for other individual spending items remained stable.

Labor Market

  • Median one-year ahead earnings growth expectations remained stable at 2.4 percent. Earnings growth expectations have stayed essentially flat at this level since December 2014.
  • Job separation expectations declined slightly. The mean perceived probability of losing a job reached a new series low at 13.5 percent, while the mean perceived probability of leaving a job voluntarily declined from 22.0 percent to 20.8 percent. Both declines were driven by respondents with high school or less.
  • The mean perceived probability of finding a job in the next three months conditional on losing a job today rose slightly to 54.8 percent, staying close to the series highs recorded in spring and summer 2015.

Household Finance

  • One-year ahead median household income growth expectations increased slightly to 2.9 percent, matching series highs posted in spring 2015. The increase seems to be driven by respondents with high school or less, and those with incomes in the $50k to $100k range.
  • One-year ahead median household spending growth expectations remained flat at 3.5 percent, matching last month's lowest level since the inception of the survey in June 2013.
  • The median expected change in year-ahead tax payments (at current level of household income) reached a new series low of a 2.7 percent increase, continuing a steady gradual decline observed since the start of our survey.
  • Both the perceived change in credit availability compared to a year ago and the year-ahead credit availability expectations became slightly more pessimistic in August: The fraction of respondents considering it easier to obtain credit declined slightly in both scenarios.

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. The sampling frame for the SCE is based on that used for The Conference Board's Consumer Confidence Survey (CCS). Respondents to the CCS, itself based on a representative national sample drawn from mailing addresses, are invited to join the SCE internet panel.

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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