{"id":1800657,"date":"2023-01-10T07:05:02","date_gmt":"2023-01-10T12:05:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1800657"},"modified":"2023-01-10T07:08:19","modified_gmt":"2023-01-10T12:08:19","slug":"americans-spending-expectations-fall-sharply-in-warning-sign-for-economy-new-york-fed","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/americans-spending-expectations-fall-sharply-in-warning-sign-for-economy-new-york-fed\/","title":{"rendered":"Americans\u2019 Spending Expectations Fall Sharply in Warning Sign for Economy: New York Fed"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Famericans-spending-expectations-fall-sharply-in-warning-sign-for-economy-new-york-fed%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1800657&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47-->\n<p>According to a Federal Reserve Bank of New York survey in December 2022, Americans plan to cut their spending in the near future. The survey showed that household spending growth expectations in the United States fell sharply in what could be a warning signal for the economy.<\/p>\n<p>Household spending growth expectations over the next 12 months fell by a full percentage point, to 5.9 percent, in December 2022, according to the latest New York Fed\u00a0Survey of Consumer Expectations.\u00a0That\u2019s the lowest level for the reading since January 2022, when the year-ahead spending growth expectations came in at 5.5 percent.<\/p>\n<p>\u201cThe decline was broad-based across age and income groups,\u201d According to the report.<\/p>\n<p>The U.S. economy is driven by consumer spending, which accounts for around two-thirds (GDP) of its gross domestic product.<\/p>\n<p>This drop in spending expectations coincides with a recent Federal Reserve downgrade of GDP forecasts.\u00a0The Fed\u2019s most recent summary of economic projections (<a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/files\/fomcprojtabl20221214.pdf\" target=\"_blank\" rel=\"noopener\">PDF<\/a>According to ), the U.S. GDP is expected to grow only 0.5 percent by 2023. That\u2019s down sharply from September 2022 projections, which called for a 1.2 percent pace.<\/p>\n<p>This suggests that inflationary pressures may be easing, as well as further cooling of the economy.<\/p>\n<p>The New York Fed survey revealed that inflation expectations for the next year fell by 0.2 percent to 5.0%, their lowest reading since July 20,21. That\u2019s likely to be met with some enthusiasm by Fed officials.<\/p>\n<p>In the face stubbornly high <a href=\"https:\/\/www.theepochtimes.com\/t-inflation\">Inflation<\/a>The Fed has increased rates at the fastest pace since 1980s, pushing the benchmark interest rate from nearly zero in March 2022 up to a range between 4.25 and 4.5 percent.<\/p>\n<p>Despite the rapid pace at which rate increases are occurring, inflation has not slowed down much since a June 2022 high of 9.0 percent.<\/p>\n<p>Investors look forward to Jan. 12&#8217;s release of the most recent data on inflation as measured by Consumer Price Index (CPI) which in November 2022 was at an annualized 7.1%.<\/p>\n<p>\u201cAnything less than broad-based improvement will rattle investors\u2019 nerves and keep the Fed active,\u201d Greg McBride is the chief financial analyst of Bankrate. He spoke to The Epoch Times by email about market expectations that new inflation data would show a fall in prices across a broad range.<\/p>\n<p>Numerous economists in the meantime have predicted that inflation will continue to be high for a prolonged period.<\/p>\n<p>Some argue that the true rate of inflation is actually much higher than the 7 percent or so pace notched in November 2022, with certain components of the CPI measure\u2014specifically housing\u2014showing up in the numbers with a lag.<\/p>\n<p>An\u00a0<a href=\"http:\/\/www.shadowstats.com\/\" target=\"_blank\" rel=\"noopener\">Alternative measures of inflation<\/a>\u00a0that uses the same methodology that the U.S. government used to measure CPI in the 1980s puts November\u2019s inflation figure at a significantly higher 15.23 percent.<\/p>\n<p>Lower <a href=\"https:\/\/www.theepochtimes.com\/t-consumer-spending\">consumer spending<\/a>According to the New York Fed survey earnings are likely to be affected by the Fed&#8217;s prediction.<\/p>\n<p>Fitch Ratings <a href=\"https:\/\/www.fitchratings.com\/research\/corporate-finance\/macro-risks-drive-global-corporate-revenue-forecasts-down-08-01-2023\">Recently revised<\/a> The company has reduced its nonfinancial corporate revenue forecasts because of expectations for slower economic growth.https:\/\/www.theepochtimes.com\/t-recession&#8221;>recession<\/a> The United States \u201cas high inflation prompts more interest rate hikes, consumer spending slows, and unemployment rises.\u201d<\/p>\n<p>Other Wall Street analysts have also begun to reduce their earnings forecasts for corporate earnings.<\/p>\n<p>FactSet (FactSet) reports that analysts have reduced their full-year 2023 earnings\/share forecasts by 4.4% to $230.51<a href=\"https:\/\/advantage.factset.com\/hubfs\/Website\/Resources%20Section\/Research%20Desk\/Earnings%20Insight\/EarningsInsight_010623A.pdf\">PDF<\/a>), which amounts to the sharpest downgrade in about eight years.<\/p>\n<h2><strong>Fed Seems to Take More Action in the Face of Tight Labor Market Conditions<\/strong><\/h2>\n<p>The number of\u00a0job openings\u00a0in the United States\u2014a measure of labor market tightness\u2014came in far higher than analysts expected, fueling concerns of more\u00a0inflation\u00a0and that the Fed will have to double down on aggressive rate hikes.<\/p>\n<p>Job openings came in at 10.5 million as of the last day of November 2022,\u00a0according to the latest Department of Labor monthly\u00a0<a href=\"https:\/\/www.bls.gov\/news.release\/jolts.nr0.htm\" target=\"_blank\" rel=\"noopener\">Employment Opportunities and Labor Turnover Survey (JOLTS)<\/a><\/p>\n<p>Market forecasts expected a lower 10 million vacancies.<\/p>\n<p>With 10.5million, the number of available jobs far surpasses the 6,000,000 Americans without work. This means that an average of 1.75 jobs are available per person who is not employed.<\/p>\n<p>While that\u2019s better than the nearly 2-to-1 levels seen in July 2022, when job vacancies soared to a record high, it\u2019s still well above the roughly 1.2 jobs per unemployed person in the years before the pandemic.<\/p>\n<p>It\u2019s also higher than Fed officials are comfortable with, because a mismatch of such proportions between job openings and the number of unemployed persons translates into upward wage pressures and, therefore, inflation.<\/p>\n<p>Federal Reserve Chair Jerome Powell has repeatedly expressed frustration with the historically elevated vacancies-to-unemployed ratio and has called for the need to reduce that number, even at the cost of higher unemployment.<\/p>\n<p>In September 2022,\u00a0Powell said he saw the \u201cneed to have softer labor market conditions,\u201d\u00a0While acknowledging the fact that higher interest rates would likely lead to higher unemployment,<\/p>\n<p>\u201cWe need to complete this task,\u201d he said at the time, noting that it won\u2019t be \u201cpainless.\u201d<\/p>\n<p>The Fed believes it will need to increase interest rates to 5 percent and maintain them for a time. It also forecasts that unemployment will reach 4.6 percent by the year 2023.<\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-tom-ozimek\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/WEB_TomOzimek-_1.jpg\" alt=\"Tom Ozimek\"   style=\"display:none\"><\/a>\n\t\t\t\t\t<\/div>\n<p>The Epoch Times&#8217; senior reporter, Tom Ozimek, is Tom Ozimek. His background includes journalism, marketing, communications, and adult education.<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>According to a Federal Reserve Bank of New York survey in December 2022, Americans plan to cut their spending in the near future. The survey showed that household spending growth expectations in the United States fell sharply in what could be a warning signal for the economy. Household spending growth expectations over the next 12 &hellip;<\/p>\n","protected":false},"author":1,"featured_media":1696806,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[3884,5458,9168,8427,8859,7498,3819,14171,4723,3834,7267,3859],"class_list":["post-1800657","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-americans","tag-bongino","tag-economy","tag-expectations","tag-fall","tag-fed","tag-report","tag-sharply","tag-sign","tag-spending","tag-warning","tag-york"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1800657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1800657"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1800657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1696806"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1800657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1800657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1800657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}