Fed survey: Household income growth retracts as spending increases in August | finder.com

Fed survey: Household income growth retracts as spending increases in August

Peter Terlato 12 September 2017 NEWS

Household large

Despite pitfalls, year-ahead financial expectations rise.

New survey data reveals American households remain confident about their long-term financial situation, even though the latest monthly fiscal indicators represent a perceived downturn.

The Federal Reserve Bank of New York’s August 2017 Survey of Consumer Expectations found median expected household income growth fell from a series high 3% in July to 2.7% last month. The data shows the decline was primarily driven by younger respondents, under the age of 40.

Median household spending growth expectations rose slightly (0.2%) to 3% in August, lifted by lower-income and lower-education survey respondents. However, this outlook remains below the 12-month average of 3.2%.

Credit availability expectations fell both year-on-year and in year-ahead expectations last month.

American households’ average perceived probability of missing a minimum debt payment over the next quarter rose marginally (0.7%) to 12.9% month-on-month in August, still below the annual average of 13.3%.

Median expectations of year-ahead changes in taxes at the current income level has risen steadily for the last three months. Consumer forecasts in August were no different, up from 2.4% in July to 2.6% last month.

However, despite this lacklustre financial confidence among households, the perception that average interest rates on savings accounts will be higher in one year increased from 34% in July to 34.4% in August.

This may have encouraged consumers to raise year-ahead expectations of US households’ overall financial situations, growing from 41.4% of respondents in July to 42.3% in August. These expectations have been increasing significantly as of late, up from 37.4% one year ago.

The national, internet-based survey involves a rotating panel of approximately 1,300 household heads.

Recent statistics show the number of nonfarm business labor hours worked rose decidedly during the second quarter of the year, boosting national productivity and increasing output across major industries.

Considering a change of pace? Expats living abroad enjoy soaking up the sun, swimming in the sea and sipping wine; ranking Portugal, on the west coast of the Iberian Peninsula, as the best country for quality of life.

Latest news headlines

Picture: Shutterstock

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site