Consumers anticipate higher spending as inflation worries climb
According to the Fed survey, median expected household spending growth rose to 5.5% in September, the highest since May 2023. Inflation expectations climbed to 3.9%, while the perceived chance of job loss dropped to 13.5%, its lowest since December 2024.
Expected household income growth edged up to 3.1%, its highest since February 2025, while the perceived probability of losing a job fell to 13.5% and the chance of finding new work after a layoff rose to 46.1%.
Median year-ahead inflation expectations climbed to 3.9% (highest since May 2023), three-year expectations rose to 3.3%, the five-year measure held at 3.0%, and expected price growth reached 5.5% for food, 4.8% for gas, 6.8% for rent, 7.5% for college and 9.2% for medical care.
The Consumer Expectations Index fell 0.7 points to 54.1, the macroeconomic and buying climate subindex slipped 2.2 points to 45.0, buying conditions dropped 1.8 points and personal financial resilience remained near 58.3.
Job mobility fell 2.2 points to 46.9, below the neutral level of 50, personal job security remained high at 80.4, perceived safety from layoffs improved to 71.9, and 51.8% of consumers said their savings would cover three months or less if income stopped.
In August, the Consumer Expectations Index had already slipped, marking the second straight month of decline.
Personal financial resilience stayed near 58.3 while buying conditions fell 1.8 points.
Personal job security stayed at 80.4 and perceived safety from layoffs improved to 71.9.
What we know
median expected household spending growth rose 0.3 percentage point to 5.5%, the highest reading since May 2023.
Median year-ahead inflation expectations climbed from 3.6% to 3.9%, the highest since May 2023.
The perceived probability of losing a job during the next 12 months fell to 13.5%, its lowest reading since December 2024, per the Fed data.
Our latest Consumer Expectations Index declined for a second consecutive month in September, falling 0.7 point to 54.1.
PYMNTS Intelligence found that 51.8% of consumers said their savings would support their current lifestyle for three months or less if income stopped.