The Americans are increasingly concerned about their financial situation in the expectations that inflation could take, according to a investigation by the New York Federal Reserve published on Tuesday.
The central bank’s monthly survey on consumer expectations has revealed that consumers expect inflation to be higher during the coming year, and less expect that their household financial situations are better in a year.
Household expenditure growth expectations have also decreased, said the New York Fed survey.
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While many Americans have expressed concerns about the rise in prices and the effect of President Donald Trump’s pricing policies, few have changed their spending habits. So far, experts say, this has helped the United States avoid significant economic slowdown.
But Americans find it more difficult to follow, according to other research. High food costs, in particular, make it more difficult to cover expenses during a typical month. The prices of the grocery store increased by 2.7% in August compared to the previous year, the fastest annual rate since August 2023, according to the last consumer price index.
“Little is more stimulated by the perception of Americans of the economy than the prices of the grocery store,” said Matt Schulz, Credit chief analyst at Lendingtree. “If people are convinced that they will simply continue to increase, it goes without saying that fewer people would think that the financial situation of their own household would be better in a year.”
“A complex set of uncertainties”
Despite the Fed’s prospects, a separate KPMG report shows that consumer spending should increase to go to advanced purchasing season at the end of the year.
“The consumer spends like a poker player with a small stack of flea,” said Duleep Rodrigo, consumer leader and KPMG retail.
“They know that they cannot play with each hand but are ready to” everything in “on a promising hand with a high emotional gain,” he said about the projections that vacation spending will increase compared to last year.
“There is also a psychological element where the consumer manages a complex set of uncertainty,” said Rodrigo.
