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November 18, 2016

Just Released: Press Briefing on the Survey of Consumer Expectations

LSE_Just Released: Press Briefing on the Survey of Consumer Expectations

The New York Fed’s Survey of Consumer Expectations (SCE) collects information on household heads’ economic expectations and behavior. In particular, the survey covers respondents’ views on how inflation, spending, credit access, and the housing and labor markets will evolve over time. The SCE yields important insights that inform our monetary policy decisions. This morning, President Dudley joined New York Fed economists to brief the press on the design of the SCE and the latest releases of survey results. President Dudley introduced the briefing by speaking about the benefits of measuring consumers’ expectations.

The first part of the briefing provided an overview of the SCE that highlighted the survey’s unique features: most notably, the panel structure that allows us to collect information from the same respondents repeatedly over time and the inclusion of questions that allow respondents to express uncertainty about future outcomes. This part of the presentation complements our technical report on the SCE, which was released recently.

The second section focused on the survey’s findings concerning medium-term inflation expectations, showing that they have recently been steady. The discussion highlighted how we use for analysis not only the respondents’ point forecasts, but also the entire distribution of their beliefs. It also presented the findings of a panel analysis showing how inflation expectations at the individual level have changed over time.

The third major topic discussed was the SCE Credit Access Survey, a special module of our survey whose October 2016 findings were released this morning. Besides highlighting some of the recent numbers, we presented evidence on how expectations (regarding applying for credit, and regarding the likelihood of credit applications being accepted) are systematically correlated with future outcomes. For example, those who report a higher likelihood of applying for credit over the next year are in fact more frequently observed to have applied for credit in the subsequent four months.

Findings from a new Credit Access Survey series were also released in the press briefing. Since December 2013, respondents have been asked the following question: “What do you think is the percent chance that you could come up with $2,000 if an unexpected need arose within the next month?” The question is similar to one used to assess the financial fragility of households in the United States and in other countries. The average response to this question in our December 2013 survey was 57.3 percent, and had risen to 65.9 percent in October 2016. This average masks substantial heterogeneity across households. For example, in October 2016, the average response for higher-income households (those with annual incomes of more than $100,000) was 85.5 percent, while for lower-income households (those with incomes less than $50,000) it was 47.7 percent. In fact, more than half (53.6 percent) of lower-income households in October 2016 reported a likelihood of less than 50 percent that they could come up with $2,000, compared with only 10.9 percent of higher-income households.

The last section of the briefing focused on the SCE Labor Market Survey, another module that has been fielded every four months since July 2014 under the SCE umbrella and that has not been publicly released before today. It collects information on respondents’ expectations and outcomes regarding labor market transitions, offers, and reservation wages (that is, the lowest wage or salary someone would accept for a job). The presentation highlighted the trends in offer expectations and reservation wages that are evident in the survey data. As the labor market has tightened, we see that expectations about offers and reservation wages have both, on average, moved up, although there are notable differences in the trends across the four regions of the United States. Interestingly, the increase in reservation wages and expected offers is most pronounced for higher-income households. We also presented evidence that expectations are predictive of outcomes at the individual level.

Further details are available in the presentation’s slide deck. Overall, the SCE shows meaningful variation in expectations over time, as well as substantial heterogeneity across different demographics. Importantly, we see that expectations for labor and credit market outcomes are predictive of individuals’ subsequent behaviors and outcomes, suggesting that these expectations have useful information content and merit regular monitoring. As the time series grows, we hope to investigate whether these expectations can serve as leading indicators of movements in the aggregate economy.


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Armantier_olivierOlivier Armantier is an assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

Topa_giorgioGiorgio Topa is a vice president in the Bank’s Research and Statistics Group.

Vanderklaauw_wilbertWilbert van der Klaauw is a senior vice president in the Bank’s Research and Statistics Group.

Zafar_basitBasit Zafar is a research officer in the Bank’s Research and Statistics Group.

How to cite this blog post:

Olivier Armantier, Giorgio Topa, Wilbert van der Klaauw, and Basit Zafar, “Just Released: Press Briefing on the Survey of Consumer Expectations,” Federal Reserve Bank of New York Liberty Street Economics (blog), November 18, 2016,

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