Press Release
New York Fed Survey Shows Consumer Expectations for Labor Market and Household Financial Conditions Remain Steady
March 10, 2014

NEW YORK—The Federal Reserve Bank of New York today released results from its monthly Survey of Consumer Expectations (SCE) which contains insight into Americans’ views on inflation, prices, the labor market and household finance.  February results show that consumer inflation expectations rose slightly in February at both the one-year and the three-year ahead horizon. Median earnings growth expectations remained above 2013 levels. The mean perceived chance of finding a job in three months, if one were to lose their current job today, declined slightly to about 46 percent. Household income and spending growth expectations remained essentially unchanged, as did past and future credit access perceptions.

Additional results from February 2014 include:

Inflation

  • Consumer inflation expectations rose slightly in February to 3.1 percent at the one-year horizon and to 3.2 percent at the three-year ahead horizon. Median expectations at both horizons remain low compared to 2013 levels.
  • Inflation uncertainty fell slightly at both horizons for most demographic groups.
  • Median home price growth expectations fell from 4.6 percent to 4.0 percent, reversing an increase in January. Dispersion in expectations across respondents fell, but home price uncertainty was largely unchanged.

Labor Market

  • Median earnings growth expectations remained essentially unchanged at 2.3 percent from the recent high reached in January (2.4 percent), above 2013 levels. While the median fell slightly, the 75th percentile of responses increased to the highest level in the past 9 months.
  • The average perceived chance of finding a job among the currently employed (if current job was lost) declined marginally to 46.1 percent, driven by declines among people with high school or less and people over 60.
  • The mean perceived chance of being laid off fell slightly, driven by a decline in expected layoff risk reported by older workers, while the mean likelihood of voluntary quits increased slightly.

Household Finance

  • Household income growth expectations remained essentially unchanged, with median expectations falling slightly but both the top and bottom quartiles of responses rising slightly.
  • Spending growth expectations were also essentially flat, but the cross-sectional distribution tightened somewhat.
  • There were no systematic changes in past or future credit access perceptions. Debt delinquency expectations (a measure of future credit constraints) were also unchanged.

About the Survey of Consumer Expectations:
The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty in expectations for the main outcomes of interest. Expectations are also available by age, geography, income, education and numeracy. 

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,200 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel allows us to observe the changes in expectations and behavior of the same individuals over time.

The survey is conducted on our behalf by The Demand Institute, a non-profit organization jointly operated by The Conference Board and Nielsen. The sampling frame for the SCE is based on that used for The Conference Board’s Consumer Confidence Survey (CCS). Respondents to the CCS, itself based on a representative national sample drawn from mailing addresses, are invited to join the SCE internet panel.

NOTE: In February 2014 the SCE has moved to 2012 ACS estimates for the demographic targets used in its sample weights.

Media Contact:
Matthew Ward
(212) 720-6885
matthew.ward@ny.frb.org