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Consumers Expect to Spend More as Inflation Anxiety Rises

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Consumers Expect to Spend More as Inflation Anxiety Rises

Inflation expectations for the year ahead rose to 3.9%, their highest since May 2023.

Expected household spending growth reached 5.5%, while expected income growth rose to 3.1%.

More than half of consumers say their savings would last three months or less without income.

Consumers are entering the final months of the year less worried about losing their jobs, more worried about prices and less confident about where their household finances are headed.

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The Federal Reserve Bank of New York’s September Survey of Consumer Expectations, released Wednesday (Oct. 7), shows median expected household spending growth rose 0.3 percentage point to 5.5%, the highest reading since May 2023. Expected household income growth rose only 0.1 point to 3.1%, its highest since February 2025.

Spending expectations rose broadly across age and education groups, according to the data. At the same time, consumers’ assessments of their current and future financial situations deteriorated. Larger shares reported being worse off than a year earlier and expected to be worse off a year from now.

The gap between expected spending growth and expected income growth does not necessarily mean consumers plan to increase the quantity of goods and services they buy. The September results suggest that part of the higher spending expectation reflects what households think those purchases will cost.

9%, the highest since May 2023. 3%, while the five-year measure held at 3%.



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