Press Release
New York Fed Survey Shows Improvement in Labor Market Expectations
July 14, 2014
NEW YORK—The Federal Reserve Bank of New York today released results from its June 2014 Survey of Consumer Expectations (SCE)  which provides insight into Americans’ views on inflation, prices, the labor market and household finance.  Labor market expectations improved in June, with median earnings growth expectations firming up and the mean expected job finding rate reaching a new high since our first survey in June 2013. Consumer inflation expectations remained essentially unchanged from May at both the one-year ahead and the three-year ahead horizons. Mean household income growth expectations increased slightly, but remained within the narrow band (2.0 – 2.6 percent) observed over the last 12 months.

Additional results from June 2014 include:

• Median inflation expectations at both the one-year and three-year ahead horizons were stable at 3.2 and 3.3 percent in June. Inflation uncertainty at both horizons also remained essentially unchanged.

• Median home price change expectations and home price change uncertainty changed little, with an overall median expected home price increase of 3.9 percent and a persistent regional gap with the median home price change expectation in the West remaining 1.5 to 2 percent higher than in the other regions of the country.

• There was also little change in median food, gas, rent and medical care price change expectations, with the exception of a rebound in the median expected change in the cost of a college education which increased from 7.9 percent to 9.1 percent fully reversing the decline observed in May.

Labor Market

• Median earnings growth expectations increased to 2.5 percent (from 2.0 percent in May), returning to levels observed in the first quarter of 2014. The increase in the overall median was driven primarily by respondents with no college education.

• The mean perceived probability of job loss fell to 14.7, matching the earlier low seen in June 2013. The fall was driven by respondents with no college education and with lower household incomes. The mean probability of leaving one’s job voluntarily in the next year instead remained unchanged in June.

• The mean probability of finding a job in three months among the currently employed (if current job was lost) rose to 51.8 percent, a new 13-month high. The increase was driven by increases in the expected job finding rate of respondents with no college education and with lower household incomes.

Household Finance
• The median household income growth expectation increased slightly from 2.3 percent in May to 2.6 percent in June, but remained within the narrow band (2.0 – 2.6) observed over the last 12 months. Median household spending expectations increased slightly from 4.5 percent to 4.7 percent.

• Perceptions of credit availability remained essentially unchanged from May both relative to one year ago and looking ahead to a year from now.

• The mean probability of not being able to make a minimum debt payment continued to improve, reaching a new 12-month low in June of 13.6.

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:
Kevin Sajdak
(212) 720-6143