NY Fed survey shows improved job market expectations

The Federal Reserve Bank of New York reported Monday that short-term inflation expectations declined in January, and expectations of the job market actually improved a little.

It’s yet another read on how consumers are feeling and doing in this economy.

Carola Binder, an economics professor at the University of Texas at Austin, said after several years of unusual readings, “what was really notable was just its lack of notability in a way, it seems like a very normal-times kind of survey read.”

And that read fits the Federal Reserve’s decision to not cut or raise interest rates.

“That’s consistent with this idea that … ‘we don't need more stimulus, we don't need less.’” Binder said.

One thing did jump out to Francesco D’Acunto, a finance professor at Georgetown University.

Despite slightly lower short-term inflation expectations and slightly better labor market expectations, “consumers seem to have a much, sort of, harsher view of potential future financial conditions in terms of their household finances,” he said.

Which D’Acunto thinks has to do with their expected ability to borrow money if they need.

“It really seems that they believe that actually interest rates on loans on any other type of product, like credit card debt … is likely to go up going forward,” he said.

While there can be a difference between low- and high-income respondents’ feelings, D’Acunto said that this time, they seemed to have pretty similar expectations.