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The New York Fed Survey of Consumer Expectations shows that consumers are more optimistic.

In the latest set of SCE results, 40.2 percent of respondents say that their household financial situation has improved compared to a year ago—the highest such reading since the survey’s inception in June 2013. Consumers’ outlook for the year ahead has also improved, with only 10.2 percent of respondents expecting their household to be worse off financially in twelve months’ time, down from 12.5 percent in January.


However, consumers do not expect to spend any more. The downtrends are still intact on one-year look-ahead spending projections.

Median Look-Ahead Spending Expectations

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  • October: 2.84%
  • November: 3.58%
  • December: 2.89%
  • January: 2.85%
  • February: 2.95%

There was a significant dip at the 75th percentile from 8 percent to 6 percent. The stock market perhaps?

Economists say that because consumers feel good, they will spend more. Here we have a survey that actually asks consumers what they will spend, but the Fed does not believe its own survey.

Instead, the Fed places faith in the University of Michigan and Conference board surveys which closely track the stock market (sometimes the price of gasoline if it is doing something unusual).

A retail spending report is out later this morning. Economists expect a 0.4% bounce following a dismal 0.3% decline in January and a 0.1% decline in December. If spending does not rebound, GDP estimates will dive.

Mike "Mish" Shedlock