The American consumer is feeling pessimistic.
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 and then spiking back up in March.
Unfortunately, pessimism appears to be back in April. In the most recent edition of the survey, the median household expected spending to increase just 3.78% over the next year, far lower than March’s median household expecting 4.51% growth, and the lowest reading in the last two years.
While this is a very bumpy series, household consumption is a huge part of the US economy. If consumers don’t see themselves increasing purchases overly much in the next year, there could be a slowdown.
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