Americans don’t Expect Wage Growth Anymore
2023.02.13 14:08
Americans don’t Expect Wage Growth Anymore
By Kristina Sobol
Budrigannews.com – In a survey of consumer expectations conducted by the Federal Reserve Bank of New York, Americans expect income growth to slow and inflation to remain high.
In a report released on Monday, the New York Fed stated that the median expected growth in household income decreased by 1.3 percentage points to 3.3% in the survey conducted in January. This was the largest monthly drop in data that has occurred in almost ten years. The outlook for one-year inflation remained unchanged at 5%.
Income growth expectations are still higher than they were before the pandemic. The average perceived probability of missing a minimum debt payment over the next three months increased in January, indicating that budget pressures are growing.
The outlook for inflation in the long run was divided among households. Three years in advance, inflation expectations fell to 2.7%, but they rose to 2.5% five years in advance.
In addition, consumers anticipate steeper price increases for food and gasoline than in December.
Expectations for home prices have also decreased as the real estate market has cooled due to higher interest rates.
Housing prices are expected to fall by 3% over the next year, which is the same as the record low set in April 2020, the month after Covid-19 was declared a pandemic. Additionally, for the first time since the beginning of the monthly survey in June 2013, people with incomes of $100,000 or more anticipate a decline in home prices in the coming year.
