Consumer Delinquency Expectations Reach Highest Level Since April 2020

In September, U.S. consumers’ delinquency expectancy increased for the fourth month in a row to  reach its highest number since April 2020, according to a recent press release regarding the Survey of Consumer Expectations published by the Federal Reserve Bank of New York’s Center for Microeconomic Data.

“While inflation expectations have eased substantially since then, consumers continue to express frustration over high prices,” said Joanne Hsu, director of the Surveys of Consumers, in a press release. In September, the average perceived probability of missing a minimum debt payment over the next three months was gauged at 14.2 percent.

Consumers are more pessimistic about the inflation rate than they were a month ago, according to the survey. Median inflation expectations at the three-year horizon rose from 2.5 percent to 2.7 percent, and for the five-year horizon, expectations rose from 2.8 percent to 2.9 percent. 

“The increases at the three- and five-year horizons were most pronounced for respondents with at most a high school degree,” the release said. Alternatively, consumers’ inflation expectations remained the same at the short-term horizon. 

Median home price growth expectations fell by 0.1 percentage point to 3.0 percent, placing it at the low end of the range that has been seen since August 2023. Alternatively, year-ahead commodity prices for food expectations rose by 0.1 percentage point. 

The report came just days after the University of Michigan Surveys of Consumers for October found an unexpected decline in consumer sentiment, driven by continued frustration over the price of goods and services. 

Consumer sentiment fell 1.7 percent after increasing the previous two months. However, it was still 8 percent stronger than one year ago, and 40 percent higher than the lowest point seen in June 2022.