Majority of Americans Say Their Condition got Worse Today than a Year Ago: New Survey

More than half of Americans say they are financially worse off than they were a year ago, a survey released Monday by the Federal Reserve Bank of New York showed.

The New York Fed’s Survey of Consumer Expectations found that 36.1 percent of respondents said they were financially somewhat worse off than a year ago, up from 32.8 in May and 19.9 percent a year ago. In contrast to a year ago, 15.2 percent, up from 3.9 percent and 13 percent in May, another said their financial condition had considerably worsen.

In total, 51.3 percent say they are worse off. First time since the survey’s inception in 2014 has a majority claimed to be in a worse situation.

The prognosis for households has also become gloomier. The percentage of those who expect having a significantly worse financial situation a year from now increased to 13.6% from 10.8% in May and 4.6 percent a year ago. From 28.6 percent in May and 16.3 percent a year earlier, the percentage of people who expect being slightly worse off increased to 31.1 percent, as per The Hill.

Inflation expectations for the coming year climbed, while those for the longer term fell, according to the survey. Consumers expected price hikes of 6.8 percent on average over the next year, up from 6.6 percent in May. This represents a new series high. Respondents over 60 and those with at least some college education were the ones who led the rise in short-term expectations, according to the New York Fed.

In contrast, the median expectation for inflation over the next three years dropped from 3.9 to 3.6 percent. All income and educational groups saw a reduction in medium-term expectations.

During the first three months of the year, the median five-year inflation expectations were stable at 3%, but they have recently started to trend somewhat lower. The five-year anticipated inflation rate decreased from 2.9 percent to 2.8 percent in June.

The median expected change in home prices over the next year dropped significantly from 5.8 percent to 4.4 percent. Since February 2021, this is the survey’s lowest reading. The New York reported that the reduction affected people of all ages, levels of education, and incomes. The West census region saw the biggest decline. The survey’s second-largest fall was this one.

The average likelihood that the unemployment rate in the United States will rise in one year jumped by 1.8 percentage points to 40.4 percent, the highest level since April 2020. According to the New York Fed, respondents with annual household earnings over $50,000 were the ones who led the increase.

The average perceived likelihood that someone will lose their job in the coming year increased somewhat from 11.1 to 11.9 percent, but it is still far lower than the 13.8 percent pre-pandemic level from February 2020. The average probability of leaving or quitting in the upcoming year decreased from 20.3 percent in May to 18.6 percent. The median probability of quitting in February 2020 was 22.2 percent.