Americans expect to tighten purse strings: NY Fed survey

[NEW YORK] Americans expected to tighten their purse strings last month, according to a Federal Reserve Bank of New York survey that also found home and gasoline prices were expected to weaken.

The New York Fed's survey of consumer expectations, released on Monday, found median one- and three-year ahead inflation expectations remained stable at 3 per cent.

But over the coming year, household spending growth expectations plunged to 3.5 per cent in July, from 4.3 per cent the previous month, hitting the lowest since the survey began in mid-2013 thanks in part to respondents over 40-years old and those with lower levels of education.

Home price inflation expectations logged the survey's second-lowest level at 3.2 per cent, from 3.5 per cent, while year-ahead gas price inflation predictions slumped to 4.4 per cent, from 5.4 per cent.

The survey taps about 1,200 respondents on a 12-month rotating basis.

REUTERS