NEW YORK—The Federal Reserve Bank of New York today released results from its August 2014 Survey of Consumer Expectations (SCE), which provides insight into Americans’ views on inflation, prices, the labor market and household finance. The median home price change expectation at the one-year ahead horizon in August was 3.5 percent, its lowest reading since the data series began in June 2013. Expectations regarding earnings growth and job separations remain toward the favorable end of their recent ranges. Finally, expected credit availability one year from now continued its steady year-long improvement.
Additional results from August 2014 include:
Inflation
- Median inflation expectations at the one-year and three-year ahead horizons slightly declined to 3.0 and 3.1 percent in August, respectively. This trend was evident across all demographic groups. Inflation expectation uncertainty at both horizons was unchanged.
- Median home price change expectations at the one-year ahead horizon declined in August to 3.5 percent, down from 4.6 percent at the beginning of the year. The decline was most pronounced for the lowest income group and for the Northeast region.
- One-year ahead price changes declined from the previous month for all commodities. Medical care price change expectations continued a 9-month decline, down two percentage points since December 2013 to 9.2 percent.
Labor Market
- One-year ahead earnings growth expectations rose from 2.2 percent in July to 2.4 percent, driven primarily by high income respondents.
- The mean perceived probability of losing one’s job returned to its 15-month low of 14.6 percent, while the mean probability of voluntarily leaving one’s job returned to its one year average of 21.6 percent.
- The mean probability of finding a job (if one were to lose their current one) declined slightly to 51 percent, but remained close to the high observed over the previous two months.
Household Finance
- One-year ahead household income growth expectations increased slightly to 2.5 percent. The increase was prevalent across all age and income groups. Spending growth expectations were largely unchanged.
- One-year ahead tax change expectations decreased for the third month in a row, from 4.1 percent in May to 3.3 percent in August.
- Credit availability perceptions moved in a positive direction. Expected credit availability one year from now continued its steady year-long improvement, from 46 percent of respondents reporting that they expected credit to be “much” or “somewhat harder” to obtain in August 2013 to only 36 percent of respondents in August 2014. Perceived credit availability one year in the past has similarly improved.
About the Survey of Consumer Expectations
The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty in expectations for the main outcomes of interest. Expectations are also available by age, geography, income, education and numeracy.
The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,200 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel allows us to observe the changes in expectations and behavior of the same individuals over time.
The survey is conducted on our behalf by The Demand Institute, a non-profit organization jointly operated by The Conference Board and Nielsen. The sampling frame for the SCE is based on that used for The Conference Board’s Consumer Confidence Survey (CCS). Respondents to the CCS, itself based on a representative national sample drawn from mailing addresses, are invited to join the SCE internet panel.
