U.S. households expected to spend less in December than they did a year ago, but spending expectations were still well above what they were immediately before the start of the pandemic, the Federal Reserve Bank of New York said today in its Household Spending Survey, which is fielded every four months as part of the broader Survey of Consumer Expectations.
The median increase in monthly household spending compared to a year ago declined to 7.7% in December, from its series high of 9% in August 2022, according to the survey. The decrease was broad-based across age, education and income groups. Still, spending expectations remained well above the pre-pandemic level of 2.5% in December 2019.
Median expected growth in monthly overall household spending over the next year decreased to 4% in December from 4.4% in August, the lowest reading since April 2021, the New York Fed said. The decrease was most pronounced in households with incomes more than $100,000. While households expected a smaller increase in their overall spending over the next 12 months, the average reported likelihood of making a large purchase over the next four months increased in December for home appliances and electronics, and declined for furniture, home repairs, vacations, vehicles and homes.
