The US economy is showing resilience, but public confidence in finances has plummeted.
2026-06-09 09:41:19
The overall US economy is performing better than market expectations, but public pessimism regarding personal finances and employment prospects continues to spread. Combined with two recent surveys from the Federal Reserve Bank of New York, residents' financial feelings continue to weaken, with multiple problems compounded by inflationary pressures, shrinking wages, and debt risks. Meanwhile, the market has formed clear expectations regarding the Fed's monetary policy direction, resulting in a divergent economic landscape.
A consumer expectations survey released by the Federal Reserve Bank of New York reflects changes in public sentiment. Data shows that in May, nearly 48% of respondents admitted their current financial situation was worse than the same period last year, the highest percentage since January 2023. Within this breakdown, 13.3% of respondents believed their financial situation had deteriorated significantly, an increase of 2.7 percentage points from April, the highest level since July 2022; the overall percentage of those who believed their situation had worsened significantly or slightly rose to 43.7%.
The public's expectations for life in the coming year are also not optimistic. 36% of respondents predicted that their financial situation would worsen, while only 22.9% were optimistic that their situation would improve. The difference between bullish and bearish expectations has fallen to its lowest level since October 2022, and overall confidence is at its lowest point in recent times.
The situation in the Middle East has led to a sharp rise in oil and gas prices, further increasing inflation risks. Multiple institutions predict that the May Consumer Price Index (CPI), to be released this Wednesday, will show a year-on-year inflation rate of 4.2%, a three-year high, with core inflation reaching 2.9%, far exceeding the Federal Reserve's 2% inflation target.
The survey shows that overall inflation expectations among the public fluctuated slightly, with one-year inflation expectations dropping slightly to 3.5%, while three-year and five-year expectations remained stable at 3.1% and 3%, respectively. Expectations for various living costs diverged significantly, with expectations for gasoline price increases declining slightly, while expectations for food and rent increases rose significantly. People also lowered their forecasts for the increase in household spending.
Federal Reserve officials warned that if the external situation remains deadlocked, short-term supply shocks could turn into long-term inflation risks.
While the job market appears to be recovering, public anxiety about unemployment is rising. Currently, about 15% of people worry about losing their jobs within a year, higher than the average of the past twelve months, and job-seeking confidence has fallen to its lowest point since December 2025.
Despite a recovery in employment and continued resilience in consumption, high oil prices continue to squeeze household income.
In May, wages rose 3.4% year-on-year, falling short of the previous month's annualized inflation rate of 3.8%, indicating a continued decline in residents' real purchasing power. Over 70% of respondents reported that income growth was failing to keep pace with inflation. Meanwhile, the national credit card delinquency rate climbed to its highest level since 2011, when the US was still in the recovery phase following the Great Recession. This phenomenon signifies that more and more families are unable to bear their debts, and financial risks continue to amplify.
Market attention is focused on the Federal Open Market Committee (FOMC) meeting on June 17. Given the current economic and inflation situation, the industry generally believes the Federal Reserve will not choose to cut interest rates this time, and market trading behavior fully reflects this judgment. Most investors are betting that the Fed will raise interest rates by 25 basis points before the end of this year to address persistently high inflation.
In summary , the US economy has shown some resilience, with employment and consumption not weakening significantly. However, high inflation eroding incomes, rising debt risks, and a lack of public confidence are prominent issues. This stark contrast between the economic picture and people's experiences presents a complex challenge for the Federal Reserve's policy adjustments.
Financial sentiment continues to deteriorate, and future expectations remain bleak.
A consumer expectations survey released by the Federal Reserve Bank of New York reflects changes in public sentiment. Data shows that in May, nearly 48% of respondents admitted their current financial situation was worse than the same period last year, the highest percentage since January 2023. Within this breakdown, 13.3% of respondents believed their financial situation had deteriorated significantly, an increase of 2.7 percentage points from April, the highest level since July 2022; the overall percentage of those who believed their situation had worsened significantly or slightly rose to 43.7%.
The public's expectations for life in the coming year are also not optimistic. 36% of respondents predicted that their financial situation would worsen, while only 22.9% were optimistic that their situation would improve. The difference between bullish and bearish expectations has fallen to its lowest level since October 2022, and overall confidence is at its lowest point in recent times.
Inflationary pressures have returned, and price expectations are showing structural divergence.
The situation in the Middle East has led to a sharp rise in oil and gas prices, further increasing inflation risks. Multiple institutions predict that the May Consumer Price Index (CPI), to be released this Wednesday, will show a year-on-year inflation rate of 4.2%, a three-year high, with core inflation reaching 2.9%, far exceeding the Federal Reserve's 2% inflation target.
The survey shows that overall inflation expectations among the public fluctuated slightly, with one-year inflation expectations dropping slightly to 3.5%, while three-year and five-year expectations remained stable at 3.1% and 3%, respectively. Expectations for various living costs diverged significantly, with expectations for gasoline price increases declining slightly, while expectations for food and rent increases rose significantly. People also lowered their forecasts for the increase in household spending.
Federal Reserve officials warned that if the external situation remains deadlocked, short-term supply shocks could turn into long-term inflation risks.
Employment concerns are rising, and the potential for income and expenditure imbalances is becoming more prominent.
While the job market appears to be recovering, public anxiety about unemployment is rising. Currently, about 15% of people worry about losing their jobs within a year, higher than the average of the past twelve months, and job-seeking confidence has fallen to its lowest point since December 2025.
Despite a recovery in employment and continued resilience in consumption, high oil prices continue to squeeze household income.
In May, wages rose 3.4% year-on-year, falling short of the previous month's annualized inflation rate of 3.8%, indicating a continued decline in residents' real purchasing power. Over 70% of respondents reported that income growth was failing to keep pace with inflation. Meanwhile, the national credit card delinquency rate climbed to its highest level since 2011, when the US was still in the recovery phase following the Great Recession. This phenomenon signifies that more and more families are unable to bear their debts, and financial risks continue to amplify.
The direction of monetary policy is becoming clearer, and expectations of interest rate hikes are constantly strengthening.
Market attention is focused on the Federal Open Market Committee (FOMC) meeting on June 17. Given the current economic and inflation situation, the industry generally believes the Federal Reserve will not choose to cut interest rates this time, and market trading behavior fully reflects this judgment. Most investors are betting that the Fed will raise interest rates by 25 basis points before the end of this year to address persistently high inflation.
In summary , the US economy has shown some resilience, with employment and consumption not weakening significantly. However, high inflation eroding incomes, rising debt risks, and a lack of public confidence are prominent issues. This stark contrast between the economic picture and people's experiences presents a complex challenge for the Federal Reserve's policy adjustments.
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