Consumers are expecting less of a household spending boost over the next year than they were a month ago, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations.
The April 2015 Survey of Consumer Expectations, released Monday, found that the median household spending growth expectations “retreated substantially” to the series low reached in February 2015 — despite that earnings and household income growth expectations went largely unchanged month-to-month.
Consumers said in April that they expected to spend 3.8% more in April 2016 — down from an expected 4.5% year-ahead increase in March.
“The decline in expected spending growth was widespread, but strongest among lower-income and lower-educated respondents,” the report states.
The 25th percentile of expected spending growth dropped to 0.8%.
Coming off a strong April jobs report showing U.S. unemployment at the lowest level since May 2008, Americans remain relatively confident in their earnings and household income growth potential, continuing March’s trend. After a marked decline in February, March’s expectations about home prices, earnings growth and household income returned to levels that prevailed during the second half of 2014, and those trends continued into April.
While the median year-ahead household income growth expectation decreased slightly to 2.8%, it remained close to the series’ high of 2.93% attained in March.