New York Fed’s February survey of consumer expectations finds consumers remain optimistic about their own finances and the U.S. economy, while inflation expectations edged down.
Consumers remain optimistic about their ability to make minimum debt payments in the next three months, according to a Federal Reserve report released on Monday.
“Expectations about the U.S. unemployment rate improved, while job finding and job loss expectations remained stable,” the Federal Reserve Bank of New York reported in its “Survey of Consumer Expectations” for February.
On average, consumers see a 10.9 percent probability of defaulting on minimum debt payments in the coming three months, the lowest reading on this measure since March 2018. This figure has been on a steady downward trend since last September, when it was 13.71 percent.
Older people are more optimistic about this measure, with those in the above-60 age group seeing only a 5.93 percent average possibility of default, compared to a 11.44 percent average for those in the 40-60 age group and 16.55 percent for the under-40 set.
See related: Fed: Card balances jumped by $2.5 billion in January
Consumers feel positive about credit access, jobs, household finances
There is also a more positive sentiment about credit availability, with 19 percent of survey respondents seeing better access to credit in a year’s time, up from 18.1 percent, and a decline in those expecting access to credit to dwindle to 32.5 percent, from January’s 36.1 percent.
People are also inclined to be more optimistic about the labor market, with those anticipating a higher unemployment rate in one year dipping to 37.2 percent, from January’s 40.6 percent. The unemployment rate fell from 4 percent to 3.8 percent between January and February, according to the federal government.
And consumers see a median growth of 2.5 percent in their earnings a year ahead, edging up from January’s 2.4 percent.
Consumers are expecting to feel better about their household finances, too, with about 42 percent of respondents expecting to be better off financially in a year’s time, compared to the 38.5 percent who felt optimistic about their financial outlook in January.
Consumers’ median expectations for inflation in the next year were down 0.2 percent points to 2.8 percent. This figure had been at a flat level of about 2.98 percent since April 2018. Those age 60 and older are anticipating higher inflation of 3 percent in the next year, compared to the 2.28 percent expectation of those age 40 or younger.