NY Fed: Consumer Optimism About Household Financial Situation ‘Improved Considerably’

Consumers are more optimistic about their household financial situation than they’ve been since February 2020.

While consumers’ perceptions about their current financial situation compared to a year ago were mostly unchanged in November, their year-ahead expectations for their situation “improved considerably,” the Federal Reserve Bank of New York’s Center for Microeconomic Data said in a Monday (Dec. 9) press release outlining findings from its November 2024 Survey of Consumer Expectations.

“The share of households expecting a better financial situation in one year from now rose to its highest levels since February 2020, while the share expecting a worse financial situation fell to its lowest level since May 2021,” the survey said.

In some of the November findings related to household finance, the median expected growth in household income increased by 0.1 percentage point to 3.1%, median household spending growth expectations declined by 0.2 percentage point to 4.7%, and the average perceived probability of missing a minimum debt payment over the next three months decreased by 0.7 percentage point to 13.2%, according to the release.

The reading of median household spending growth expectations was the lowest since April 2021, and that of the average perceived probability of missing a minimum debt payment over the next three months was the lowest since June, the release said.

The survey found that median year-ahead expected growth in government debt “decreased sharply” by 2.3 percentage points to 6.2% — the lowest reading since February 2020, per the release. It also found that consumers expect both the average interest rate on saving accounts and the prices of U.S. stocks to be higher in 12 months.

This news came on the same day that The Conference Board reported the biggest improvement in employment trends since 2022. The organization’s Employment Trends Index (ETI) saw its largest two-month increase in two years in October and November, indicating likely growth in employment.

A Friday (Dec. 6) jobs report from the Bureau of Labor Statistics may prove to be a tailwind for job searching, PYMNTS reported. The report found that employers added 227,000 jobs in November, more than the consensus forecast of 220,000.

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