Survey: Consumers Expect Inflation, Income And Spending To Rise

Consumers expect inflation, income and spending to rise, according to the June 2021 Survey of Consumer Expectations, a monthly gauge of economic health by the Federal Reserve Bank of New York’s Center for Microeconomic Data.

The results show an increase in the median inflation expectations in the short term — up 0.8 percentage points to 4.8 percent — and no change in the expectations for the medium term (3.6 percent), per a press release announcing the results.

Expectations regarding unemployment (down from 31.9 percent to 30.7 percent) and the perceived likelihood of job loss (down from 12.6 percent to 10.9 percent) reached new lows, meaning that more consumers are confident about the labor market’s outlook.

When it comes to changing jobs amidst this economic recovery, the mean probability of survey respondents voluntarily leaving their jobs in the next 12 months dipped from 18.7 percent to 18.6 percent, close to the trailing 12-month average of 18.1 percent.

Survey respondents are more confident than they have been since the pandemic about finding another job if they were to lose their current position, with that result up 0.2 percentage points to 54.2 percent, the highest it’s been since February 2020.

Other survey results show that consumers plan to increase spending (up 0.2 percentage points to a record-high 5.2 percent) and bring in more money in the year ahead (up from 2.8 percent to 3.0 percent). That latter number is the highest it’s been since before the start of the coronavirus pandemic, driven by respondents who have at least some level of college education.

There remains confidence in the expectation of home prices to continue their upswing, according to the survey results.

These numbers mesh with the latest results of the Visa U.S. Spending Momentum Index, which shows that 53 percent of people are spending more today than a year ago, although the pace of spending growth was slightly slower from May to June. The Conference Board Consumer Confidence Index reached its highest level since the COVID-19 pandemic, climbing for the fifth straight month to reach 127.3 in June, marking an increase from 120 in May.