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Economy in Brief

N.Y. Fed: Consumer Expectations Vary Over The Last Year
by Tom Moeller  July 14, 2014

Households expectations regarding inflation have been fairly sanguine. The expected inflation rate of 3.2% during the next year was unchanged and near the midpoint of the varying changes during the last year. Inflation expectations during the upcoming three years were constructive, for an inflation rate of 3.3% versus a 3.8% rate as recently as last August.

Home price expectations deteriorated. The latest figure of 3.9% home price inflation for the next year was down from 4.6% in January. It compared to a lessened median estimate of 4.9% for the next three years, down from 5.5% last summer. By region, expectations for home prices during the next year varied between 3.6% for the Northeast and 5.3% in the West.

The firmer labor market generated varying perceptions regarding income growth. The 2.5% expectation for earnings growth during the next year was a series' high and up from 1.8% in December. Expected household income growth of 2.6% also was improved versus 2.0% in December. Expectations varied greatly, however, by income bracket. High income earners expected to earn 3.0% or more during the next year, a percentage point greater than those earning less than $50,000.

Perceptions of employment conditions improved of late. A series low 14.7% thought they would lose their job during the next twelve months, down from last year's 17.9% high. Job churn was in evidence as a raised 21.7% thought they'd leave a job voluntarily during the next twelve months.

The new Federal Reserve Bank of New York Survey of Consumer Expectations is dedicated to household finance. The information collected in the survey on household income, spending, and access to credit provide a real-time picture of U.S. households' situation and perceptions. The Consumer Expectations data can be found in Haver's SURVEYS database.

      Survey of Consumer Expectations - Federal Reserve Bank of N.Y. (%) Jun May Apr Jun'13
Median Expected Inflation Rate
   One Year Ahead 3.2 3.2 3.3 3.1
   Three Years Ahead 3.3 3.2 3.2 3.4
Median Home Prices
   One Year Ahead 3.9 4.0 3.8 4.7
   Three Years Ahead 4.9 5.0 5.0 5.5
Earnings Growth
   Overall 2.5 2.0 2.0 2.0
   Education High School or Less 2.5 1.6 1.3 1.5
   Education Some College 2.0 2.0 2.0 1.7
   Education BA or Higher 2.7 2.6 2.7 2.3
Job Separation Expectations 
    Probability of Losing a Job 14.7 16.5 16.1 14.7
    Probability of Leaving a Job Voluntarily 21.7 21.7 21.6 18.5
Household Income Growth
   One Year Ahead: Total 2.6 2.3 2.6 2.3
      Under 50K 2.0 1.9 2.2 2.1
      50-100K 2.9 2.8 2.6 2.8
      Over 100K `3.3 2.9 3.4 3.5
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