NY Fed Survey Reveals Consumer Pessimism at Lowest Point Since 2022
Barry Knapp slams outdated Fed models, urges Warsh to strip Big Tech accommodation
Americans are increasingly reaching a breaking point regarding their household finances. Despite hopes for a soft landing after years of elevated inflation, consumer pessimism has reached some of its worst levels in years. This is evident from the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released on Monday.
The survey reveals that the percentage of U.S. households reporting they are “much worse off” financially than a year ago has risen to 13.3% in May. This marks an increase of more than 2 percentage points from April and represents the highest reading since July 2022. Furthermore, 36% of Americans anticipate their financial situations will deteriorate further over the coming year, while fewer than 23% expect any improvement. This results in the lowest net optimism since October 2022.
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While overall inflation expectations remained largely unchanged, respondents foresee higher costs ahead. Specifically, they expect a 5.8% increase in food prices and a 7.4% rise in rent over the next year.
More Americans report being “much worse off” financially, according to the latest Federal Reserve Bank of New York survey. (Getty Images)
The latest Fed survey aligns with the Federal Reserve’s most recent Beige Book, which summarizes economic conditions across the Fed’s 12 regional districts. The report indicates that prices “increased at a moderate to strong pace overall,” with most districts reporting higher inflation compared to the previous report.
According to the Fed’s national summary, “Districts noted that energy-related costs tied to the conflict in the Middle East were the primary driver of inflationary pressures, with spillovers into shipping, packaging, groceries, and fertilizer.” The Cleveland Fed specifically noted increased fuel surcharges.
Consumer concerns are also evident in the labor market. Respondents reported that their confidence in finding a new job if they lost their current one has fallen to its lowest level since December 2025. Less than half of workers (43.7%) believe they would be able to find a replacement job if laid off.
FOX Business host Larry Kudlow gives an update on the status of the U.S. economy on ‘Kudlow.’
“Labor market expectations deteriorated somewhat with an increase in layoff expectations and a decline in job finding expectations,” the New York Fed stated in its release.
However, the Bureau of Labor Statistics reported that employers added 172,000 jobs in May, exceeding economists’ estimates, with unemployment holding steady at 4.3%. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, described the May jobs report as a “Payroll Blowout!” She emphasized that confidence in the labor market is growing, suggesting that the Fed’s focus should remain on inflation. “It will all come down to the duration of this war to determine the Fed’s next move. For now, the move is to not move: HOLD,” she stated.
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The consumer report also highlighted that more than 1 in 8 Americans (12.6%) believe they may miss a minimum debt payment over the next 90 days. This increase is primarily driven by respondents with at least a high school education and households earning less than $100,000 annually. Additionally, retired Americans over 60 and workers earning less than $50,000 annually reported lower spending-growth expectations.
FOX Business’ Eric Revell contributed to this report.
Barry Knapp slams outdated Fed models, urges Warsh to strip Big Tech accommodation
Americans are increasingly reaching a breaking point regarding their household finances. Despite hopes for a soft landing after years of elevated inflation, consumer pessimism has reached some of its worst levels in years. This is evident from the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released on Monday.
The survey reveals that the percentage of U.S. households reporting they are “much worse off” financially than a year ago has risen to 13.3% in May. This marks an increase of more than 2 percentage points from April and represents the highest reading since July 2022. Furthermore, 36% of Americans anticipate their financial situations will deteriorate further over the coming year, while fewer than 23% expect any improvement. This results in the lowest net optimism since October 2022.
TOP CEOs BRACE FOR DOWNTURN, WARN U.S. ECONOMY WILL WORSEN IN NEXT 6 MONTHS
While overall inflation expectations remained largely unchanged, respondents foresee higher costs ahead. Specifically, they expect a 5.8% increase in food prices and a 7.4% rise in rent over the next year.
More Americans report being “much worse off” financially, according to the latest Federal Reserve Bank of New York survey. (Getty Images)
The latest Fed survey aligns with the Federal Reserve’s most recent Beige Book, which summarizes economic conditions across the Fed’s 12 regional districts. The report indicates that prices “increased at a moderate to strong pace overall,” with most districts reporting higher inflation compared to the previous report.
According to the Fed’s national summary, “Districts noted that energy-related costs tied to the conflict in the Middle East were the primary driver of inflationary pressures, with spillovers into shipping, packaging, groceries, and fertilizer.” The Cleveland Fed specifically noted increased fuel surcharges.
Consumer concerns are also evident in the labor market. Respondents reported that their confidence in finding a new job if they lost their current one has fallen to its lowest level since December 2025. Less than half of workers (43.7%) believe they would be able to find a replacement job if laid off.
FOX Business host Larry Kudlow gives an update on the status of the U.S. economy on ‘Kudlow.’
“Labor market expectations deteriorated somewhat with an increase in layoff expectations and a decline in job finding expectations,” the New York Fed stated in its release.
However, the Bureau of Labor Statistics reported that employers added 172,000 jobs in May, exceeding economists’ estimates, with unemployment holding steady at 4.3%. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, described the May jobs report as a “Payroll Blowout!” She emphasized that confidence in the labor market is growing, suggesting that the Fed’s focus should remain on inflation. “It will all come down to the duration of this war to determine the Fed’s next move. For now, the move is to not move: HOLD,” she stated.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
‘The Big Money Show’ breaks down new IRS limits for 401(k)s and IRAs, giving savers more room to invest for retirement.
The consumer report also highlighted that more than 1 in 8 Americans (12.6%) believe they may miss a minimum debt payment over the next 90 days. This increase is primarily driven by respondents with at least a high school education and households earning less than $100,000 annually. Additionally, retired Americans over 60 and workers earning less than $50,000 annually reported lower spending-growth expectations.
FOX Business’ Eric Revell contributed to this report.
