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Consumers curb earnings expectations, New York Fed survey shows
[NEW YORK] Consumers curbed expectations for wage increases in February while the outlook for prices was little changed, according to a Federal Reserve Bank of New York survey.
Median expectations for earnings growth over the next year fell to 2.2 per cent from 2.5 per cent the month before, marking the lowest level since July. Expectations for inflation a year from now slipped to 2.8 per cent from 2.9 per cent, and inflation expectations three years ahead were unchanged at 3 per cent.
The tempered outlook for higher wages was driven by consumers under the age of 40, who reduced their expectations for earnings growth over the next year to 2.5 per cent from 2.9 per cent.
The average probability of finding a job in the next three months if one were to lose one's job today rose to 54.5 per cent, the highest on record going back to June 2013.
Consumers also decreased expectations for household spending over the next year. The median survey respondent expected spending to rise 3.8 per cent over the next year, the lowest in the history in the survey. In January, consumers had projected a 4.1 per cent increase in spending.
The survey is a nationally representative, Internet-based survey of a rotating panel of approximately 1,200 household heads, the New York Fed said.