US consumers have grown more pessimistic about their personal finances and the jobs market, despite little change in their expectations for inflation, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations. ([investing.com](https://www.investing.com/news/economy-news/consumers-more-worried-about-personal-finances-and-jobs-new-york-fed-report-shows-4892029))
Households put the average probability of the US unemployment rate being higher in a year at 44.4% in August, up 1.6 percentage points from July and the highest level since April 2020, when the economy was being hit by the Covid-19 pandemic.
The increase was spread across respondents of different ages, income groups and education levels, the New York Fed said. However, people’s perceived likelihood of losing their own job over the next 12 months fell slightly to 13.8%, its lowest level since February.
Respondents also became less confident about finding new work if they lost their current job. The perceived probability of securing employment in those circumstances dropped by 0.8 percentage points to 45.4%.
Household finances and credit access deteriorate
Views of current and future household finances weakened in August, with more people saying they were worse off than a year earlier and expecting their position to deteriorate further over the next 12 months.
Credit conditions were also viewed less favourably. A larger share of households said credit was harder to obtain than a year ago, while more expected access to become more difficult in the coming year.
The average perceived probability of missing a minimum debt payment over the next three months rose by 1.2 percentage points to 13.2%, slightly above its 12-month average. Expected household spending growth also increased to 5.2%, from 4.9% in July.
Inflation expectations were broadly steady. Consumers continued to expect prices to rise by 3.6% over the next year and by 3% over five years, while the three-year forecast eased to 3.2% from 3.3%.
Expectations for petrol prices increased, with respondents anticipating a 4.6% rise over the next year. The survey was conducted between August 3 and August 31 among a nationally representative panel of about 1,300 household heads.
The findings come ahead of the Federal Reserve’s two-day policy meeting on September 15 and 16. Investors and policymakers are also awaiting the latest US consumer price index figures, due on Friday, which could influence the central bank’s decision on interest rates.
