The Federal Reserve Bank of New York’s latest Survey of Consumer Expectations reveals that consumers’ earnings and household income expectations for the coming year declined slightly from April to May while credit availability perceptions compared to last year and the coming year remained unchanged.
The median expected household income growth declined from 2.8% in April to 2.4% in May, according to the Fed. The drop in May, influenced by responses from consumers with education less than a college degree and older and middle-income respondents, reflects a stop to the "upward movement observed since January."
The median household spending growth expectations, however, remained the same from April to May at 3.5% and remain at relatively low levels in place since July 2015, according to the Fed. Consumers’ expectations of their household financial situation a year from now deteriorated slightly.
When asked if they would be "much better off, somewhat better off, about the same, somewhat worse off or much worse off," than a year ago, 4.27% of consumers said they would be much better off, compared to 5.89% in April. The percentage who said they would be somewhat better off a year from now changed from 32% to 30.64% in April to May, respectively. At the same time, the percentages who said they would be somewhat or much worse off increased, according to the Fed.
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 behave. It also shows consumers’ views on job prospects, earnings growth and their expectations about future spending and access to credit.
In May, when asked if obtaining credit was "much easier, somewhat easier, equally easy/hard, somewhat harder" or "much harder" than it was a year ago, 6.35% of consumers said it would be much harder to obtain credit now, compared to 7.57% of consumers who gave that answer in April. Those who felt it will be "much harder" to obtain credit a year from now, decreased slightly from 6.01% in April to 5.79% in May.
The percentages who responded that it will be equally as easy/hard to obtain credit a year from now showed little change from April to May, 50.36% to 49.49%, respectively, according to the survey. The percentage who said obtaining credit will be “somewhat easier” a year from now changed from 15.84% to 15.31%.
The average perceived probability of missing a minimum debt payment over the next three months increased slightly from 12.4% in April to 12.8% in May, according to the Fed.