NEW YORK—Consumer expectations in the September 2015 Survey of Consumer Expectations (SCE) show relatively stable median consumer inflation expectations at both the short and long term horizon. Inflation expectations, as well as median one-year ahead expected growth in the costs of several commodities (food, housing, medical, college education) are all at or near their lowest levels since the start of the survey in June 2013. Median earnings growth and household spending growth expectations decreased sharply from the prior month. Median expected spending growth is more than a percentage point below its June 2015 level and has reached a new series low.

Additional results from September 2015 survey include:

Inflation

• Median inflation expectations declined slightly at both the one-year (from 2.8 to 2.7 percent) and the three-year ahead (from 2.9 to 2.8 percent) horizons. The 75th percentile of expected one-year ahead inflation declined 0.4 percentage points to 4.8 percent, its lowest level since the data series began in June 2013.
• Median home price change expectations rose slightly from 3.0 percent in August to 3.1 percent, but remain considerably lower than expectations reported during the past two years.
• The median one-year ahead expected gasoline price change rebounded somewhat from 3.2 percent to 3.8 percent but remains below values seen one year ago before the drop in oil prices.
• Expectations for changes in food prices and changes in medical care costs and the cost of a college education declined to 4.8 percent, 8.8 percent and 6.0 percent respectively – with the median expected increase in food prices and college cost matching or reaching new series’ lows.

Labor Market

• Median one-year ahead earnings growth expectations declined to 2.2 percent from 2.5 percent in August. This decline was largest among older workers and those with lower education levels. The 75th percentile of expected earnings growth dropped from 4.2 percent in August to 3.8 percent.
• The mean perceived probability of losing one’s job in the next 12 months increased from 13.5 percent in August to 14.6 percent, but remains within the tight range of 13.5 to 15.0 percent seen in 2015.
• The mean perceived probability of leaving one’s job voluntarily increased from 20.8 to 22.4 percent, while that for the probability of finding a job (if current job were lost) remained unchanged.

 
Household Finance

• Median household income expectations fell slightly from last month’s median expected growth of 2.9 percent to 2.8 percent, still well above its average reading since June 2013. The decline was driven by lower income and lower education respondents.
• Median household spending expectations decreased from 3.5 percent in August to 3.2 percent, a new low in our data series. The decline was consistent across most demographic groups (age, education, income).
• Perceptions of credit availability relative to one year ago remained stable, while expectations about year-ahead credit availability deteriorated slightly.
• The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.2 percentage points to 10.9 percent, a new low in our data series.
• The average perceived probability of a higher average year-ahead interest rate on savings accounts increased from 29 to 31 percent.

 

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.

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