Tag: Consumer Confidence

But less optimistic about finding new jobs: New York Fed

According to the Federal Reserve Bank of New York’s Center for Microeconomic Data’s Survey of Consumer Expectations, consumers’ expectations for inflation substantially declined in July, but they were less optimistic about their ability to find a new job in the next three months.

Reports revealed that the median inflation expectations for one year ahead fell to 6.2% in July from 6.8% in June. The decline was broad-based across income groups but largest among respondents with annual household incomes of less than $50,000 and no more than a high school education.

Looking at the labor market, median one-year-ahead earnings growth remained unchanged for the seventh consecutive month in July at 3.0%.

Mean unemployment expectations — or the mean probability that the US unemployment rate will be higher one year from now — fell by 0.2 of a percentage point to 40.2% in July.

The mean perceived probability of losing one’s job in the next 12 months declined slightly to 11.8% in July from 11.9% in June. It remained below its pre-pandemic reading of 13.8% in February 2020.

The mean probability of leaving one’s job voluntarily in the next 12 months rose to 19.5% in July from 18.6% in June. The series has moved within a narrow 18.6% to 20.4% range over the past year.

Meanwhile, the mean perceived probability of finding a job in the next three months (if one’s current job was lost) declined to 55.9% in July from 56.8% in June, moving slightly below its trailing 12-month average of 56.5%.

The report draws data from an internet-based survey of a rotating panel of approximately 1,300 household heads.

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17.0% of consumers said business conditions were “good,” down from 19.5% in June

According to the Conference Board Consumer Confidence Index, consumer confidence fell moderately in July following a larger decline in June.

It marked the third consecutive month of declines in the index, which now stands at a level of 95.7, down from 98.4 in June.

Lynn Franco, Senior Director of Economic Indicators at The Conference Board said that the decrease was driven primarily by a decline in the Present Situation Index. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist.

Franco said: “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”

Inflation and surging gas and food prices remained top concerns for consumers and weakened their expectations, Franco went on to note. Meanwhile, purchasing intentions for cars, homes, and major appliances have softened further in July.

Present situation

  • Consumers’ appraisal of current business conditions was less favorable in July. 17.0% of consumers said business conditions were “good,” down from 19.5% in June. However, 24.0% of consumers said business conditions were “bad,” up from 22.8%.
  • Consumers’ assessment of the labor market was less optimistic: 50.1% of consumers said jobs were “plentiful,” down from 51.5% in June, and 12.3% of consumers said jobs were “hard to get,” up from 11.6%.

Six-month outlook

  • Consumers’ optimism about the short-term business conditions outlook was mixed in July; 14.0% of consumers expect business conditions will improve, down from 14.6% in June. Conversely, 27.2% expect business conditions to worsen, down from 29.7%.
  • Consumers’ optimism about the short-term labor market outlook was also mixed;15.7% of consumers expect more jobs to be available, down from 15.9% in June. However, 21.4% anticipate fewer jobs, down from 22.2%.
  • Consumers were more pessimistic about their short-term financial prospects. The index found 14.7% of consumers expect their incomes to increase, down from 16.1% in June, while 15.7% expect their income to decrease, up from 15.3%.
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