Americans increasingly were worried about losing their jobs and expected to curb their growth in spending in the wake of the coronavirus outbreak, a March survey of consumer expectations by the Federal Reserve Bank of New York found.
The perceived probability of losing employment jumped to 18.5%, a record since the survey started in 2013, and the outlook deteriorated sharply in the second half of the month, the New York Fed said. A majority of those surveyed expected the national unemployment rate to move higher over the next year.
The Fed survey echoed the results of other consumer confidence polls, which have plunged as the virus has spread and imposed a partial shutdown of the U.S. economy, with millions of Americans filing unemployment claims over the past few weeks. The U.S. jobless rate, which jumped to 4.4% in March from 3.5%, rose at the fastest pace in one month since 1975 amid expectations of some economists it may top 10% in April.
The outlook deteriorated across the board in how consumers viewed the economy. The median expected growth in income and spending declined and expectations for home price gains fell to just 1.3%, another series low. There was greater concern among respondents about losing access to credit or missing a debt payment.
Inflation expectations held up in the survey, with year-ahead expectations unchanged at 2.5%, while three-year expectations dropped to 2.4% from 2.6%. There was, however, an increase in uncertainty over the path of future inflation among survey respondents.