Americans expect the state of their finances to mend significantly in a year, according to a survey released Monday by the Federal Reserve Bank of New York.
According to the bank’s January Survey of Consumer Expectations, households’ expected level of spending a year from now surged to 4.2%, the best reading since June 2015. At the same time, survey respondents predicted their future incomes would rise by 2.4%, a 0.2 percentage point increase from the prior month and the highest reading since February 2020, before the coronavirus pandemic took hold.
The New York Fed report arrives amid broad-based hope that the rollout of vaccines to combat Covid-19 will start allowing economies around the world to return to some semblance of normality, maybe even by this summer. A number of Fed officials believe that while data for the start of the year will showcase some challenges, the U.S. economy could grow by 5% to 6% this year.
The New York Fed data appears to show that consumers are themselves predicting a return to a healthy economy.
“Perceptions about households’ current financial situations compared to a year ago improved slightly in January, with fewer respondents reporting that credit is harder to obtain,” the report said. “Respondents were also slightly more optimistic about their households’ financial situations in the year ahead with more respondents expecting their financial situation to improve a year from now,” it said.