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Fewer People Expect to Miss Debt Payments, But Signs of Worsening Economy Are On Horizon

The number of individuals who expect to miss a minimum debt payment during the next three months slipped again in November, according to data released yesterday by the Federal Reserve Board of New York, and is at its lowest point in six months.

Just over 12% of those participating in the bank’s Survey of Consumer Expectations expect to miss a minimum debt payment during the next three months, down from 12.71% in October and 12.5% in November 2017. The data point reached a high in September at 13.71% and has dropped in the subsequent two months.

Meanwhile, about the same number of individuals expect to be better off financially a year from now as felt that way in October, but the number of individuals who feel they are going to be worse off financially a year from now is starting to climb. Among those who answered “somewhat worse off” or “much worse off”, 12.54% selected either of those options in November, up from 11.02% in October. That figure has not been that high since May, according to the bank.

For those with jobs, the average expected earnings growth during the next year is only 2.02%, down from 2.76% in September, meaning individuals expect any increase in their incomes to be less than they thought just two months ago. As well, the number of individuals who expect to lose their job reversed its downward trend and increased in November, while the number of individuals who expect to find a job remained mostly flat from October.

The percentage of people who expect the unemployment rate to be higher a year from now also increased, to 35.76%, a mark that hasn’t been reached in more than a year.

 

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