US consumers worry about job market and finances in 2024

According to the Federal Reserve Bank of New York’s August Survey of Consumer Expectations, consumer anxiety regarding the U.S. labor market and household finances has increased. Nearly 38% of respondents anticipate a rise in the unemployment rate over the next year, up from 36.6% in July. However, the percentage of consumers expecting to lose their jobs has decreased slightly to 13.3%, which is below the 12-month average. This indicates a mixed outlook on job security among consumers. The survey also revealed a significant increase in job-seeking behavior, with 28.4% of individuals actively searching for employment, a notable rise from 19.4% in July. Despite these concerns, inflation expectations have stabilized, with consumers maintaining a one-year inflation outlook of 3%. However, expectations for three-year inflation have increased slightly to 2.5%, indicating ongoing concerns about rising costs in essential areas such as gasoline, medical care, and rent. Financially, more than one-third of respondents believe their household's financial situation has worsened compared to the previous year. Nevertheless, there is a slight increase in the median expected growth of household income, now at 3.1%. The perceived risk of missing minimum debt payments has also risen, reaching the highest level since April 2020, reflecting growing financial strain among consumers. Overall, while there are signs of optimism regarding income growth, the prevailing sentiment remains one of caution as consumers navigate a challenging economic landscape marked by rising inflation and job market uncertainties.