Survey shows people are watching TV and reading the newspapers.
For the third consecutive month, more households reported that their financial situation had worsened rather than improved over the past year.
But due to inflation, not falling nominal income:
Moreover, due to a higher expected inflation rate and smaller expected wage gains, 46% of all households anticipated declines in their inflation adjusted incomes during the year ahead, the worst reading since the 1990 recession.
Overall, consumers expected a year-ahead inflation rate of 3.7% in early February, up from 3.4% in the prior three months.
The Fed uses this as one of their inflation expectation indicators. It has gone from too high to even higher.
In contrast, long term inflation expectations, a proxy for core inflation, was unchanged and well anchored at 3.0% in February.
Yes, but still too high.
Eighty-six percent of all consumers thought that the national economy was in decline, the highest level recorded since 1982. Year-ahead prospects for the national economy were just as bleak as 72% expected bad times, a level comparable to the worst levels in the recessions of the early 1990’s and 1980’s. The anticipated downturn is expected to result in more joblessness in the year ahead, a prime concern of consumers. A rising unemployment rate was expected by 52% of all consumers in early February, up from 33% a year ago, and comparable to the peak levels recorded in the months surrounding prior recessions.
The rest is more of the same and shows influence of the media.
Personal FinancesÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬ÂCurrent went from 98 to 96
Personal FinancesÃƒÂ¢Ã¢â€šÂ¬Ã¢â‚¬ÂExpected 116 to 108
The survey clearly shows expectations have deteriorated for both the economy and inflation.