Increasingly optimistic about the economy, U.S. consumers now expect to earn, borrow, and spend like they did before the pandemic or even years before it, according to the New York Federal Reserve Bank’s latest monthly survey.
Overall, households viewed their current financial situation more favorably when compared to the same time a year ago, and they were also more optimistic about where their household’s finances may stand in the year ahead, according to the March Survey of Consumer Expectations released Monday.
Households surveyed said they expected to spend a median 4.7% more in the coming year, the highest reading since December 2014. It's the second consecutive month respondents have said they expect to increase their spending more than they have at any point in the last six years.
To offset that spending, households expect their income to grow a median 2.81% in the coming year, the largest expected jump since January 2020. Respondents also felt more secure in their employment, with the number expecting to lose their job dropping to 12.8% from 14.2% in February, the lowest level since February 2018. And, in March, more households reported finding it easier to obtain credit now than a year ago, with the expectation that credit will be even more widely available in the coming year.
The survey findings add to increasing signs that consumers believe a return to something like normal life is right around the corner. And they’d be justified, with the economy showing signs of life lately. The labor market added the most jobs since August last month, aided by government efforts like the American Rescue Plan. The latest round of stimulus checks alone will send the economy soaring the rest of the year, economists say.
The NY Fed’s Survey of Consumer Expectations is a nationally representative, internet-based survey of about 1,300 heads of household. Respondents participate in the panel for up to 12 months.