American consumers are getting a bit anxious about their ability to borrow money these days. A recent survey by the New York Federal Reserve, released on Monday, paints a picture of people feeling a tad uneasy about credit.
According to the survey, almost 60% of respondents think it’s tougher to get loans, credit cards, and mortgages now compared to a year ago. That’s the highest level of concern we’ve seen since they started tracking this data back in June 2013. The survey is part of the New York Fed’s August Consumer Expectations report.
These worries about credit access have been steadily on the rise since early 2022, which coincides with the Federal Reserve’s decision to start increasing interest rates. Over the past year, the Fed has bumped up its key interest rate 11 times, totaling a 5.25% increase, all in an effort to control inflation.
Speaking of inflation, people have mixed feelings about it. Expectations for inflation over the next one and five years have only ticked up by 0.1 percentage point, reaching 3.6% and 3% respectively. The three-year outlook actually dipped a little to 2.8%. The Fed’s inflation target is 2%.
However, folks are a bit more concerned about prices for everyday stuff. Respondents in the survey think gas prices will rise by 0.4 percentage points to 4.9%, medical care by 0.8 points to 9.2%, food by 0.1 point to 5.3%, and both college education and rent by 0.2 points to 8.2% and 9.2%, respectively.
And there’s also some growing anxiety about job security. The survey found that the average expectation of losing one’s job in the next year increased by 2 percentage points to 13.8%, the highest it’s been since April 2021. This is happening even though the unemployment rate is relatively low, at 3.8%, just 0.1 percentage point higher than it was a year ago.
