Americans’ expectations for how much more they will spend in the next year increased sharply to 9% in May from 8% the month earlier. It is the fifth consecutive increase and a new high, according to the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released today. According to the survey, the increase was “most pronounced” for respondents between the ages of 40 and 60 and respondents without a college education.
Inflation expectations for the year ahead increased from 6.3% to 6.6% in May, tying the highest reading since the survey began nine years ago. In contrast, the inflation expectations for the next three years remained unchanged at 3.9%. The median expected growth in household income decreased by 0.1 percentage point to 3% in May, remaining just above its 2021 average of 2.9%. Perceptions about households’ current financial situations deteriorated in May with more respondents reporting they are financially worse off today than a year ago.
