Every month the New York Fed conducts a Survey of Consumer Spending Expectations covering three broad categories: inflation, labor market and household finance.
The SCE contains monthly insight about how consumers expect overall inflation and prices for food, gas, housing, education and medical care to change over time. It also provides Americans’ views about job prospects and earnings growth, as well as their expectations about future spending and access to credit. Finally, the SCE provides measures of uncertainty in expectations for the main outcomes of interest.
Expectations are available by age, income, education, numeracy and geography.
Let’s take a look at some of the details, plus a chart that I created from their Excel spreadsheet.
Inflation, Labor Market, Finance
Inflation expectations are complete nonsense. The labor market view is likely backward looking. Respondents expect raises of about two percent despite the fact that wage growth has been averaging more than that.
The Fed left off what I believe is the most important data series: Spending expectations.
One Year Ahead Household Spending Expectations
Instead of believing its own survey that shows spending assumptions are headed down, the Fed has faith in all sorts of consumer confidence numbers that I believe are mostly garbage.
May Readings
- High 8.14
- Median 3.5
- Low 0.38
The trendline projections do not portend high “confidence” if one wants to use that particular word.
The low-end is particularly telling. It suggests those consumers are deep in debt, wanting to pay down credit, not spend more.
Mike “Mish” Shedlock.
“It suggests those consumers are deep in debt, wanting to pay down credit, not spend more.”
Deleveraging … across the board.
As US flirts with NIRP … and investment alternatives look bleak … (in debt) consumers will realize that paying down high cost debt best form of investment.
Back in 2009 saw where this (QE/ZIRP) was going … leading to deflation .. not (hyper) inflation and best course of action was to pay down debt.
Central Banks have REALLY painted themselves into a corner.
This article reflects consumers are acting very rationally.
What we are seeing here would be totally expected consoidering that the demographics are increasingly skewed toward retirement. Anything that the Fed does to spur growth will only backfire and make things worse.
All the more reason to get the FED out of the Central Planning business. The Central Planning Politburos did not work for the economies of Eastern Europe or the USSR, and will not work for the USA. The only purpose of the FED, the IRS/health care bureaucracy, NSA, etc. is to “herd” or control the population.
Better to let the economy function in a free market fashion without a Central Planning Politburo like the FED, and risk Freedom. However, Freedom in the USA is a risky business, as it threatens the War Party neo-Con agenda (Hilary is the current torchbearer). Centralized control, of which the FED is only one prong, is being strengthened under Obama. How else to perpetuate the lie that Hitler rules Russia (even flimsier than Iraqi weapons of mass destruction to sell Iraq War II) and sell Hilary’s neo-Con war agenda against Russia. Already the EU is signing up and gathering an EU army; the EU empire is at least honest that besides debt collection (from Greece to Africa), they are preparing for war against Russia. EU and War Party can live with Brexit, but not with USAexit via dumping the Clinton I/Bush II/Obama/Clinton II War Party machine.
I simply briefed over the numbers in the chart, but I don’t see the point. I don’t see “expectations” vs. actual results, which could be a useful tool. Otherwise?
The entirety of Wall Street is and always will be MASSIVELY LEVERED AND SHORT US Treasuries.
Go ahead…step in front of that train…
Short US Treasuries has been a massively losing strategy for quite a number of years now. Loaning the Wall Street train Treasuries to short and collecting the interest on their losing bet would be the winning strategy, for whomever is doing it.
Which is not to say that it will not reverse some time in the future. But being wrong about “when” has been a massively deep hole for the shorts for too many years. Maybe if Hilary and the War Party get their wish for a war against Russia over Crimea and Ukraine, and it goes nuclear, then perhaps Treasuries will tank along with a radioactive Wall Street and an incinerated New York City that will remember 9-11 as the minor happening on American soil. Perhaps the Bernie and Occupy Movements will be supportive of Hilary with those hopes in mind. Short or long Treasuries, may not matter in the end.
Would be interesting to know which side of the Treasury equation the War Party inner circle is betting on.