Consumer Pessimism Swells as US Unemployment Rate Expectations Reach Multi-Year High
US consumers have become increasingly pessimistic about their personal finances and jobs in August, according to a report from the New York Federal Reserve. The survey of consumer expectations found that households expect inflation at 3.6% one year from now and 3% over the next five years, but their outlook on the broader economy has worsened.
Expectations for the unemployment rate rose to the highest level since April 2020, with consumers becoming less confident about finding new employment if they lost their jobs involuntarily. This combination points to a more fragile view of the labor market, with households appearing less confident in their ability to recover from job loss.
Households also became more pessimistic about their current and future financial situations, with their assessment of access to credit weakening as well. Inflation expectations offered little relief, with consumers continuing to see inflation running above the Federal Reserve's 2% target.