NEW YORK (MaceNews) – US consumer worries about job losses and household finances ratcheted up in March as COVID-19 fears rose, the Federal Reserve Bank of New York reported.
The Fed’s survey of households, conducted March 2-31, shows “a considerable deterioration in households’ expectations regarding their labor market and financial situation across all age, education, and income groups,” the Fed said. The Fed said responses to the survey showed dramatically worsening expectations as the month went on.
By the last week of March, many components in the survey had reached a new series (post-June 2013) high or low. Median household spending growth expectations trended into negative territory during the final week of March, more than 2 percentage points below their pre-March low, while the share of respondents expecting to be financially worse off a year from now increased sharply, climbing to well above 40 percent.
For the survey’s full-month result, the perceived probability of losing one’s job reached 18.5%, its highest level since the inception of the survey in June 2013. The increase was broad-based but particularly pronounced for respondents with a college degree. The expected growth in households’ income and spending fell sharply and the perceived availability of credit worsened.
Additionally, the perceived risk of missing future debt payments increased substantially. Median inflation expectations remained stable at the one-year horizon at 2.5% and decreased at the three-year horizon from 2.6% to 2.4%. The dispersion in inflation expectations across respondents and the reported inflation uncertainty increased at both horizons. Median one-year ahead expected change in home prices reached a new series’ low at 1.3%.