The American consumer is starting to feel better.
One of the questions on the New York Fed’s monthly Survey of Consumer Expectations asks respondents how they expect their household spending to change over the next year. This has been a very jumpy indicator over the last several months, with expectations plummeting in February, spiking back up in March, and then falling to a new low in April.
May saw a small uptick in household growth expectations, and now the new report from June shows that upswing continuing. As of last month, the median household expected to increase spending 4.29% in the next year.
Consumer activities are a central part of the US economy: About 69% of GDP comes from personal consumption expenditures. What consumers plan to do has a potentially enormous impact on economic growth.
Having an idea of what consumers are thinking is useful in the context of the upcoming report on June retail sales, scheduled to be released Tuesday morning. Retail sales saw some weakness in the early spring, just like the New York Fed’s consumer expectations survey, but then bounced back in May.