Good news! Americans are feeling great all of a sudden about their personal finances.
Ok, maybe “great” is a stretch. Let me put it this way: In the context of the post-pandemic “vibecession,” households are feeling pretty good about things.
In the latest installment of the New York Fed’s consumer survey, released to the usual crickets on Monday, the share of respondents who said they expect to be “somewhat” or “much” better off financially a year from now jumped to 37.6%. That was the highest since February of 2020, which is to just prior to the onset of the pandemic in the Western world.
The MoM increase was the largest in the (admittedly short) history of the series, and as the figure shows, it wasn’t close.
The color accompanying the survey described a “considerable” improvement in perceptions of household finances. Note that the share who said they expect to be worse off a year from now dropped to the lowest since May of 2021.
This underscores what it’s fair to describe as cognitive dissonance among consumers — or at least among surveys purporting to convey consumers’ expectations. The preliminary read on University of Michigan sentiment for this month suggested Americans are palpably concerned about tariffs, and other polls indicate households are pulling forward purchases in anticipation of higher prices.
And yet, in the NY Fed survey, we find Americans effectively buying into the Trump mythos, which is to say accepting at face value the narrative that says Trump, as a businessman, is self-evidently “good for business.” Time will tell.
The other notable takeaway from the release: Expectations for growth in government debt dropped sharply.
At 6.2%, the latest reading was the lowest since pre-pandemic days.
I suppose that’s faith in Scott Bessent. Or, to make the obvious joke, faith in the fiscal management bona fides of the self-declared “King Of Debt.”
You can fool some of the people…
We should change this old proverb to: “You can fool most of all the time.” The “man” is already walking back a lot of promises. Going to be a strange summer.
Asking households about growth in government debt seems like an odd question. Any thoughts on why that might be one of the survey questions?
Either way, another data point in a never ending series of data points demonstrating a lack of basic reasoning skills given the long history of Republican profligacy. Tax cuts ain’t cheap!
Admittedly I know very little about this world, but I always found it strange we trade on any surveys from the general public. If we’ve learned anything, it’s that the average person doesn’t know dick about squat, so to speak
The light at the end of the tunnel…
Trickle down economics is when they are pissing on you and telling you that it is raining.
I always find it funny/ironic that anyone asks Retail their forecast for the future (except to front run their misjudgement).
Theyve bought it hook line and sinker; so when the layoffs/decrease in spending/higher deficits actually do occur….will they believe their lying eyes? Or will they believe its temporary as they are told ‘its going great’?
Those numbers seem preposterous to me, Are you sure you didn’t get a Trump fantasy in your inbox? I would bet on it!
Excuse me? This is a monthly survey from The New York Fed. It’s documented by every financial media outlet on the planet, and it’s publicly available. In other words: WTF are you talking about, John? Everyone knows what this survey is. Here: https://www.newyorkfed.org/newsevents/news/research/2024/20241209