Consumers more worried about personal finances and jobs, New York Fed report shows

U.S. consumers showed little change in their outlook for inflation in August, according to the New York Federal Reserve's latest Survey of Consumer Expectations. Respondents still projected 3.6% inflation in a year and 3% five years from now. However, their concerns about the job market and personal finances grew more pronounced.

The report indicated that expectations of unemployment rates rising in the coming year hit a peak in August since April 2020, during the height of the COVID-19 pandemic. This increase in pessimism was consistent across age, income, and education groups. On the flip side, the likelihood of losing a job and the ease of finding new employment following an involuntary job loss both decreased from July to August.

Additionally, respondents' self-assessments of their present and future financial situations, as well as their outlook on credit access, both declined in August. The report was released a week before the Federal Reserve's upcoming policy meeting on September 15-16. With inflation still a significant challenge, the meeting's outcome hinges on the release of the August Consumer Price Index on Friday.

Some Fed officials believe the data will make a clear case for maintaining the current interest rate level, while others are ready to push for rate hikes.