US households are hopeful they will be able to spend more freely, according to a survey released Monday by the Federal Reserve Bank of New York – a sign that some consumers feel their finances could soon be turning the corner after taking a hit during the pandemic.
Expectations for how much spending will grow over the next year rose to a median 4.2 percent, the highest rate in more than five years. However, the outlook for how much earnings will grow over the next year remained flat at 2.0 percent, the sixth straight month without change.
Consumers also reported a mixed outlook for the labor market, with the perceived odds of losing one’s job over the next year declining to an average 13.6 percent in January, reaching the lowest level since September 2019.
However, the expected chance that the US unemployment rate would be higher in a year rose to 40.2 percent in January from 38.9 percent in December.
The report shows the challenges US households are facing nearly a year into the global pandemic that led to a surge in joblessness and killed more than 460,000 Americans.