American consumers increased their expectations for spending, inflation and home prices in March, the Federal Reserve Bank of New York said in a press release, citing its “Survey of Consumer Expectations.”
Consumers’ expectations for household income climbed by a median of 0.4 percentage points to 2.8 percent in March, while their expectations of household spending increased for the third straight month to a median of 4.7 percent in March from 4.6 percent in February, according to the report.
And, in terms of the labor market, consumers’ expectations for one-year ahead expected earnings growth fell by a median of 0.2 percentage points to 2 percent in March — the level at which it had stayed from July 2020 to January 2021, according to the report.
Consumers’ expectations for unemployment, which is the chance that the U.S. unemployment rate will be higher one year into the future, fell to a mean of 34.4 percent in March from 39.1 percent in February — “the lowest level since the start of the pandemic,” according to the press release.
“Labor market expectations continued to recover with higher expectations about job security and improved unemployment expectations. Finally, households were more positive about their current and expected financial situation and their ability to access credit,” according to the press release.
Consumers’ expectations for inflation at the one-year and three-year horizons each grew by a median of 0.1 percentage point last month in March to 3.2 percent and 3.1 percent, respectively. The increase comes on the heels of a steady rise in both metrics during the last five months. Those expectations are now “their highest since mid-2014,” according to a press release.
Additionally, consumers’ expectations for year-ahead home price changes climbed by a median of 0.8 percentage points to 4.8 percent in March.
Powell said in an interview with CBS that the economy “seems to be at an inflection point,” making note of the broad vaccinations and formidable fiscal and monetary support as 2021 goes on.
He also said that the economy could “grow much more quickly” from here on out.
Selected by EFXA