Consumers' expectations about earnings, income and spending improved in February, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations.
Survey respondents also were "slightly more optimistic" about their perceived credit availability for the year ahead, the Federal Reserve reported.
"The average perceived probability of missing a minimum debt payment over the next three months remained stable at 11.8%, close to its 2015 average of 12%,” according to the Fed.
Consumers’ median expected household income growth rose from 2.2% in January to 2.5% in February, but the figure remains lower than results recorded during 2015. The increase was led by older, less educated and lower income respondents, the Fed reports. Household spending growth expectations continued to rebound with an increase to 4% in February compared to lows of 2.9% and 3% in December and January. "This brings the series closer to its historic average of 4.3% and away from the December 2015 low of 2.9%," according to the Fed.The Fed also found in the survey that the median one-year ahead expected earnings growth rebounded after a two month decline.
"The median one-year ahead expected earnings growth rebounded to 2.5 percent in February, back to levels recorded for most of 2015," according to the news release. "The increase was broad-based across demographic groups, but was most pronounced among respondents with a high school degree or less."
The Survey of Consumer Expectations is based on consumers' expectations for overall inflation and how they expect prices for food, gas, housing and education to trend. It also shows consumers’ views on job prospects, earnings growth and their expectations about future spending and access to credit.
Expectations for changes in the costs of healthcare, college education and rent also rose slightly, while food price expectations remained stable, the Fed reports.