According to the Federal Reserve Bank of New York, the probability of higher unemployment in a year reached 44.4% in August, the highest level since April 2020. Simultaneously, the likelihood of finding a new job after a layoff dropped to 45.4%.
While the perceived risk of losing a current job fell to 13.8%, the expected voluntary quit rate increased to 19.5%. Median household income growth expectations remained at 3.0%, while projected spending growth rose by 0.3 percentage points to 5.2%.
Data from PYMNTS Intelligence indicates that 19% of households reported a decline in financial stability over the past year, compared to 7.1% who saw improvement. The share of consumers struggling to pay bills rose from 18% to 27%.
Only 26% of households with deteriorating financial positions can cover more than three months of expenses with savings. Additionally, the perceived probability of missing a minimum debt payment within the next three months increased to 13.2%.
Inflation expectations for the next year remain at 3.6%. Furthermore, 28% of households faced an unexpected expense of at least $1200 in the last 90 days, with many relying on credit cards or borrowing to cover these costs.
