World News

U.S. consumers expect spending growth to slow: NY Fed

(Reuters) – American consumers expect their household spending to increase more slowly over the next year, according to a report released by the Federal Reserve Bank of New York on Tuesday.

Overall, the median forecast was for household spending to grow by 2.3% over the next year as of December, down from the 2.8% expected in December 2018, according to a survey by the New York Fed. Consumers with a high school education or less reported the largest decline in expectations.

Americans expect their spending on clothing, food, medical care and housing to grow more slowly over the next year, when compared to their outlook at the end of 2018. Median expectations for how much more consumers expect to spend on education remained constant at 0.4%.

Monthly household spending increased by a median 2.5% in December when compared to a year earlier. Lower-income households earning below $50,000 a year reported the largest increase in spending for the poll, which is conducted every four months.

The share of households who made a major purchase in the last four months rose to 62.5% in December, reaching another series high. That was up from 60.7% in December 2018, with the largest increase taking place among households earning between $50,000 and $100,000.

(Reporting by Jonnelle Marte; Editing by Andrea Ricci)