US Consumers Fear Of Jobs And Debt Payments Due To Coronavirus: New York Fed Investigation

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(Reuters) – The economic toll of the coronavirus pandemic hit Americans last month. New York Monday.

FILE PHOTO: A woman crosses the void on Park Avenue in Manhattan as the coronavirus (COVID-19) epidemic continues in New York, United States, April 5, 2020. REUTERS / Eduardo Munoz

Expectations dramatically worsened throughout the month, concerns increased after the first death from COVID-19 in the United States and after the World Health Organization officially declared a pandemic and more drastic measures were taken. taken to limit the spread of the disease. See the graphic here here

Household spending growth expectations fell sharply in the third week of March. The survey found that the proportion of people who expected deterioration in a year dropped to “well above” 40% by the end of the month.

More and more people feared job losses as a growing number of non-core businesses were closing across the country and residents had to stay at home.

Expectations that the unemployment rate will be higher within a year rose to 50.9% on average in March, the highest since the survey was launched in 2013 and up from 34.2% in February.

The odds of losing a job in the next 12 months increased to 18.5%, up almost 5 percentage points from February and another high series. The survey found that growing fears of losing a job were “widespread” and noted by workers at all levels of education. Those with a college diploma reported the largest increase, making them as nervous about becoming unemployed as those with less education, showed the results.

Consumers have become less confident about the chances of finding a new job after losing a job, with the average perceived probability of finding a job dropping to 53.0% in March from 58.7% in February.

Americans have also become more concerned about their ability to access loans or track debt payments. Some 38.8% of households said they expected it to be more difficult to access credit in the next 12 months, up from 28.3% in February. The perceived chances of missing a minimum debt payment in the next three months increased to 15.1%, above the 12.6-month moving average of 11.6%.

The Consumer Expectations Survey is a monthly survey based on a rotating panel of 1,300 households. The survey was conducted from March 2 to March 31.

Median inflation expectations for the following year have remained unchanged at 2.5%, but there has been a sharp increase in uncertainty about what price changes should look like in a year or three years.

Report by Jonnelle Marte; Editing by Chizu Nomiyama and David Gregorio

Our standards:Principles of the Thomson Reuters Trust.

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