Americans’ spending expectations are rising, according to a report from the Federal Reserve Bank of New York released Monday.
In its November Survey of Consumer Expectations, the central bank found households reporting the highest level of expected spending growth since July 2016, at a predicted 3.7% rise for a year down the road, up from 3.1% in October. The increase was driven by households earning under $50,000 a year.
The spending forecast comes against a backdrop of expected household income gain holding steady at 2.1%,which the New York Fed noted was below the long-run average of an expected 2.8% increase in income.
Despite the expected rise in spending, “respondents were more pessimistic about their households’ financial situations in the year ahead, with more respondents expecting their financial situation to deteriorate, and fewer respondents expecting an improvement in their financial situation,” the report said.
Meanwhile, survey respondents’ expectation for inflation a year from now rose from 2.8% in October to 3% last month, while expectations for inflation three years from now moved to 2.8%, from 2.7% in October. The bank noted there is considerable uncertainty about the outlook for price pressures.
