In a month when Americans in most states were being asked to stay home because of the coronavirus pandemic, U.S. consumers became more fearful about losing their jobs and more pessimistic about their ability to access credit or pay their bills, according to a survey released on Monday by the New York Federal Reserve.
Consumers’ perceived chances of losing their jobs rose to the highest level seen since the survey launched in 2013. Their expectations of how much they would earn and spend dropped to a series low. Inflation expectations increased only slightly for the next year and three years, but there was more uncertainty about the forecasts.
As millions of Americans lost their jobs, they became more pessimistic about the hit their finances would take during the downturn - and worried about facing long spells of unemployment.
Workers said there was a 20.9 per cent chance, on average, that they could lose their job in the next 12 months, an increase of 2.4 percentage points from the month before. The perceived chances of finding a new job in the next three months, after becoming unemployed, dropped 6.1 percentage points to 47.0 per cent in April - the largest monthly decline since the launch of the survey.
Nearly four in 10 respondents said they are worse off today financially than they were a year ago, up from 30 per cent in March and compared to 15 per cent a year ago.
The survey of consumer expectations is a monthly poll based on a rotating panel of 1,300 households.
Expectations for inflation over the next year and the next three years, usually one of the main focuses of the survey, increased slightly to 2.6 per cent.
Consumers also worried the downturn could affect the housing market. For the first time since the survey was launched in 2013, the median respondent did not expect home prices to increase over the next year. Some 44 per cent of respondents said they expect home prices to decline over the next 12 months.
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