By Jonnelle Marte
U.S. consumers are more optimistic that the worst of the economic crisis sparked by the coronavirus pandemic is behind them, but are still concerned about their earnings and their ability to find new jobs if they become unemployed, according to a survey released on Monday by the New York Federal Reserve.
Workers became less concerned about becoming jobless, with consumers saying there was a 15% chance that they would lose their jobs in the next year. That dropped 3.6 percentage points from May and is the lowest since February, when consumers registered a 13.8% chance of losing their jobs over the next 12 months.
Consumers also expressed more confidence in their ability to pay their bills. The probability of missing a debt payment in the next three months dropped to 9.8% in June, the lowest since the survey launched in 2013 and down substantially from 16.2% in April.
The shift mirrors one in the labor market. The U.S. unemployment rate surged to 14.7% in April as businesses across the country shut down to limit the spread of the virus. As some businesses re-opened and hired workers back, the jobless rate declined to 11.1 % in June. However, more than 32.9 million people were collecting unemployment checks in the third week of June, suggesting it could take the labor market years to fully recover from the pandemic.
Despite the tepid optimism, workers lowered their expectations for future earnings – with low-wage workers expecting the slowest growth.
The median expectations for how earnings would grow over the next year dropped to 1.6% in June from 2.0% in May, hitting a series low. Workers earning less than $50,000 a year, and those without college degrees, expected earnings growth to slow the most.
The survey of consumer expectations is a monthly poll based on a rotating panel of 1,300 households.
(Reporting by Jonnelle Marte; Editing by Nick Zieminski)