Press Release

Consumers Slightly Less Optimistic about Personal Finances and the Economy

February 11, 2019

NEW YORK – The Federal Reserve Bank of New York’s Center for Microeconomic Data released the January 2019 Survey of Consumer Expectations, which shows that while short- and medium- term inflation expectations were unchanged, households were generally less optimistic about the economy and about future changes in their financial situation. Expectations that the unemployment rate will be higher a year from now increased for the fourth consecutive month, and expectations about government debt growth increased sharply. Regarding their own financial situation, respondents were less optimistic about future credit availability, and fewer expect to be financially better off a year from now.

The main findings from the January 2019 Survey are:


  • Median inflation expectations at both the one-year and three-year horizons were unchanged at 3.0% in January. Inflation expectations at both horizons have been very stable over the past nine months.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—also was unchanged at the one-year and three-year horizons.
  • Median home price change expectations were stable at 3.0% in January, after six consecutive months of decline from a recent high of 3.9% in June.
  • Expectations for changes in the cost of medical care decreased to 8.3% in January, from 9.0% in December. The median one-year ahead expected change in gasoline and food prices increased to 4.5% and 4.2% in January, respectively, from 4.2% and 3.7% in December.

Labor Market

  • Median one-year ahead earnings growth expectations declined to 2.4% in January, from 2.5% in December, and remain below the 2018 average of 2.6.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased 1.8 percentage points in January, to 40.6%, marking the fourth consecutive increase and the highest level since March 2014. The increase was broad based across age, education and income groups.
  • The mean perceived probability of losing one’s job in the next 12 months increased to 14.5%, from 13.8% in December, moving above the trailing 12-month average of 14.2%. The mean probability of leaving one’s job voluntarily in the next 12 months increased to 21.4% from 21.1%, remaining just below the trailing 12-month average of 21.5%.  
  • The mean perceived probability of finding a job (if one’s current job was lost) increased slightly to 59.2%, from 58.8% in December, and is now 0.4 percentage points above the 2018 average. The series has been stable since June 2017, remaining within a narrow range of 57.1 to 60.1%.  

Household Finance

  • Median expected household income growth decreased slightly in January, to 2.8%, from 2.9% in December, and is in line with the 2018 average.
  • Median household spending growth expectations decreased notably, falling from 3.5% in December to 3.0% in January, which is below its 2018 average of 3.2%. Spending growth expectations can be volatile and exhibit seasonality, but they stabilized in 2017 and 2018 after declining from annual averages of 4.7%3.7%, and 3.5% in 2014, 2015, and 2016, respectively.
  • Expectations for year-ahead credit availability deteriorated further in January. The proportion of respondents expecting improved conditions is now at its lowest level since October 2016.
  • The average perceived probability of missing a minimum debt payment over the next three months was unchanged, at 12.0%.
  • The median expectation regarding year-ahead change in taxes (at current income level) rose slightly, to 2.7%, which is the highest reading since October 2016 and well above the 2018 average of 2.1%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today decreased to 37.0% in January, from 37.9% in December.
  • One-year ahead expectations as well as perceptions about households’ current financial situations deteriorated further in January, with smaller shares of respondents expecting to be and feeling better off financially. The proportion of respondents expecting to be better off financially is at 38.6%, the lowest reading observed since November 2016. 
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now rose to 40.4%, from 39.6% in December.
  • Median year-ahead expected growth in government debt increased sharply, jumping from 6.1% in December to 9.1% in January, the highest reading since September 2014.

About the Survey of Consumer Expectations (SCE)
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 1,300 household heads. Respondents participate in the panel for up to 12 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.

Brian Manning
(212) 720-6143
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