Press Release
New York Fed Survey Shows Consumer Expectations Mainly Stable
May 12, 2014

NEW YORK—The Federal Reserve Bank of New York today released results from its April 2014 Survey of Consumer Expectations (SCE) which provides insight into Americans’ views on inflation, prices, the labor market and household finance.  Home price change expectations fell slightly for the fourth straight month, reaching a new low of 3.77 percent. Consumer inflation expectations rose slightly at the one-year ahead horizon but declined at the three-year ahead horizon. Median earnings growth expectations declined to 2 percent, the lowest level this year while the mean likelihood of finding a job among the employed also declined. Mean household income growth expectations increased to 2.64 percent, the highest level since August 2013 and household spending growth expectations increased slightly. Perceived credit availability was largely unchanged.

Additional results from April 2014 include:

Inflation

  • Median inflation expectations at the one-year ahead horizon rose to 3.3 percent in April (from 3.2 percent in March), but declined at the three-year ahead horizon to 3.2 percent (from 3.4 percent in March). Inflation uncertainty at both horizons increased slightly.
  • Median home price change expectations fell slightly for the fourth straight month to 3.8 percent, the lowest level since the start of the survey in June 2013. The decline from the last month is driven by higher-income households.
  • Median food, gas and rent price change expectations increased slightly. There was a small decline in median medical care price change expectations while median expectations for changes in the cost of a college education were largely unchanged.

Labor Market

  • Median earnings growth expectations declined to 2 percent, the lowest level this year. The decline was driven by respondents with lower education levels.
  • The mean perceived probability of job loss and changing primary residence were unchanged however, the mean perceived probability of leaving one’s job voluntarily in the next year increased to 21.6 percent.
  • The mean probability of finding a job in three months among the currently employed (if current job was lost) declined from 49 percent in March to 46.6 percent. 

Household Finance

  • Household income growth expectations increased from 2.3 percent in March to 2.6 percent, the highest level since August 2013. Income growth expectations increased for all education groups and median spending growth expectations increased slightly by 0.1 percent.
  • The expected one-year ahead change in taxes rebounded somewhat in April from a decline in March.
  • Perceptions of credit availability did not change dramatically from the prior month. Delinquency expectations, however, increased slightly and expectations of a higher interest rate on savings accounts one year from now decreased slightly to 28.4 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. 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.

Media Contact:
Matthew Ward
(212) 720-6885
matthew.ward@ny.frb.org