Bidenflation: Spending Expectations Jump to New Record High

US President Joe Biden speaks about legislation to boost the economy at United Performance Metals, a specialty metals solutions center in Hamilton, Ohio on May 6, 2022. (Photo by OLIVIER DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images)
Photo by OLIVIER DOULIERY/AFP via Getty Images

Public expectations of household spending rose to a record high in April, data from the Federal Reserve Bank of New York showed Monday.

The New York Fed said that households expect their spending to rise by 8 percent over the next year, up from 7.7 percent in March and 4.6 percent a year ago.

The jump was driven by a change in expectations among older Americans. The median expectation for spending among Americans over 59 years old jumped to a rise of 9 percent from 7.9 percent a month ago and 4.7 percent a year ago. Consumers under 40 expect to spend 6.6 percent more, the same as they did in March and up from 4.5 percent a year earlier. Consumers between 40 and 59 expect to increase their spending by 7.8 percent, down from 8.4 percent in March but up from 4.5 percent a year ago.

Households earning less than $50,000 expect to increase spending by 9.1 percent, even with March and up from 4.5 percent a year ago. Households with over $100,000 of income see their spending rising 8.1 percent over the coming year. Those households with more than $50,000 and less than $100,000 in income see spending rising 8.1 percent.

Despite the rising spending plans, the New York Fed regional said that consumers see 6.3 percent inflation in April, down from 6.6 percent in March.

That change appears to be driven by a decline in expectations in gas price hikes. The median expected increase in rent hit a record high.

Longer-term expectations for inflation moved higher. Over the next three years, inflation expectations rose to 3.9 percent from 3.7 percent in March. Uncertainty about inflation rose to a new record high in April.




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