Last month, consumers reported the highest level of financial optimism since June 2013, according to the Survey of Consumer Expectations by the Federal Reserve Bank of New York. Expectations for household income growth and overall financial situation reached a record high, while spending expectations fell to their lowest point.
The SCE surveys a rotating panel of about 1,200 households every month. Respondents are chosen from those who responded to The Conference Board’s Consumer Confidence Survey.
Household income expectations were up slightly to 2.8% from 2.5% in March, while expectations for their overall financial situation reached a new high. Over 44% of respondents expect to be better off financially in one year than they are now, and just 11% say they will be worse off.
Household spending expectations fell to 2.6%, the lowest level since the survey was started in June 2013. There was some concern among respondents about their ability to meet debt obligations. Twelve percent said there was a chance they could miss a minimum payment over the next three months, a one-point increase over March.
Uncertainty over inflation fell, as consumers reported they believe inflation will tick up to a median 2.8% from 2.7% over the next year. Their three-year outlook for inflation puts it at 2.9% by 2020.