Consumers see inflation easing, anxious about job market, personal debt: NY Fed survey

Published On Sep 9, 2024, 11:47 AM

The latest Survey of Consumer Expectations from the Federal Reserve Bank of New York reveals that while consumers are seeing signs of easing inflation—projecting it at 3% in the next year—there is rising concern about the job market and personal debt levels. The likelihood of consumers missing debt payments has reached its highest level since April 2020. Attitudes towards the job market are mixed; although fears of job loss are decreased, optimism around finding new employment has waned. Income growth expectations have slightly increased, but overall consumer sentiment indicates anxiety about financial stability and economic conditions ahead of upcoming inflation data from the Labor Department.

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Stock Forecasts

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Negative

Given the concerns about the labor market and rising anxiety over personal debt payments, this could negatively impact consumer spending, which is a significant driver of the economy. If consumers are worried about their financial situations, they may reduce discretionary spending, which could affect related sectors such as retail and consumer services.

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Positive

The expected cut in interest rates by the Federal Reserve may provide some support to consumers and businesses alike, potentially stimulating spending and investment. However, the cautious consumer outlook could temper the effectiveness of these measures. Interest-sensitive sectors might benefit if rates are reduced significantly, as lower borrowing costs may boost consumer sentiment in the long term.

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