Americans expect financial situation to worsen as pessimism rises
Americans started the year with a less optimistic view of the U.S. economy, as households see a number of headwinds potentially impacting their personal financial situations.
According to a new survey from the Federal Reserve Bank of New York, most households predict they will be worse off financially in one year – only 38.6 percent think they will be better off, the lowest reading in more than two years.
Expectations for income growth decreased when compared with December – as did expectations for spending. Spending growth estimates fell to 3 percent in January, from 3.5 percent in December. However, as noted by the bank, these predictions can be volatile.
Consumers expect to have a harder time accessing credit – as the number of respondents expecting credit availability to improve fell to the lowest level since 2016.
People also expect interest rates on savings accounts will rise over the next 12 months.
The New York Fed's findings are in line with monthly cconsumer sentiment readings. According to the University of Michigan, sentiment in January fell to the lowest level since October 2016 amid concerns about U.S. economic growth.
CLICK HERE TO GET THE FOX BUSINESS APP
When it comes to the economy, respondents expected their earnings one year from now to be slightly lower than the 2018 average. They also had a more pessimistic outlook regarding the unemployment rate and the probability of losing their job over the next 12 months. However, on the upside, for those who thought they might lose their job, they also cited slightly increased prospects of finding a new position.
As for the stock market, more people in January thought prices would be higher by the beginning of 2020.