US saw an improvement in consumers’ views on their financial conditions and credit availability, alongside stable inflation expectations over various horizons, according to the January 2024 Survey of Consumer Expectations by the Federal Reserve Bank of New York. Inflation expectations for the near and distant future remained unchanged, with median predictions holding steady at 3 per cent for one year ahead and 2.5 per cent for five years ahead. However, there was a slight decline in the three-year ahead inflation expectations, dropping to 2.4 per cent from 2.6 per cent.

Interestingly, the survey indicated a rise in the disagreement among respondents regarding inflation forecasts, especially for the one-year and five-year ahead horizons, while it decreased for the three-year horizon. Additionally, there was a slight increase in median inflation uncertainty across all three horizons, suggesting growing unease about future inflation outcomes.

In terms of labour market expectations, median one-year ahead expected earnings growth saw an uptick, rising by 0.3 percentage points to 2.8 per cent, mainly driven by older respondents and those without a college degree. This return to the previously observed range between 2.8 per cent and 3 per cent suggests a cautious optimism about income prospects, as per the survey.

Conversely, the mean unemployment expectations rose marginally to 37.2 per cent from 37 per cent, remaining below the series' 12-month trailing average. The perceived risk of job loss in the next 12 months decreased significantly, aligning with a reduced likelihood of voluntarily leaving one's job. Additionally, the confidence in finding a new job if one lost their current position dropped to its lowest level since June 2021.

Fibre2Fashion News Desk (DP)

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