According to the August Survey of Consumer Expectations, median inflation expectations decreased slightly to 2.8 percent at the medium-term horizon and increased slightly at the short- and longer-term horizons, respectively, to 3.6 percent and 3.0 percent.
The amount on perceived income growth dropped to 2.9 percent, which is the lowest level since July 2021. Both perceptions of the present credit environment and expectations for the future declined. The way that households perceived their present financial situations and expectations for the future both declined.
The share of households stating it is harder to obtain credit than a year ago reached a new series high in August, as perceptions of credit access compared to a year ago declined. The outlook for future credit availability also declined in August, with a growing percentage of respondents anticipating that it will be more difficult to get credit in the coming year.
The projected likelihood that a minimum debt payment will not be made during the following three months decreased on average by 0.6 percentage points to 11.1%.
Its highest reading since April 2021, the mean anticipated probability of losing one’s work in the upcoming year increased by 2.0 percentage points to 13.8%. The average likelihood that a person will leave their work voluntarily in the upcoming year climbed by 1.9 percentage points to 18.9%. For responders with a high school diploma or less and a yearly household income under $50,000, both increases were particularly noticeable.
If one’s current employment were lost, the average anticipated likelihood of obtaining another job fell by 0.1 percentage point to 55.7%.
Stay informed about economic trends and news. Understanding the broader economic environment can help you make informed decisions.
Review your insurance coverage. Make sure you have adequate health, life, and disability insurance. It’s essential to protect yourself and your family in case of illness or disability.
Invest in your skills and education. In a tough job market, having valuable skills can make you more employable. Consider taking courses or certifications that align with your career goals.
Investigate possibilities for income diversification. Starting a side business, working as a freelancer, or purchasing income-producing assets like equities, bonds, or rental properties are a few examples of how to do this.
Reduce debt with a high interest rate. Pay off credit card debt and, if possible, look into refinancing loans with reduced interest rates. You’ll have more financial freedom during a slowdown if you reduce your debt.
Review your investment portfolio. Depending on your risk tolerance and investment horizon, you may want to adjust your asset allocation to a more conservative mix of investments during an economic slowdown.
Be aware of government programs and assistance available during economic downturns. These programs may include unemployment benefits, food assistance, or housing assistance. Familiarize yourself with the eligibility criteria and application process.
Consider seeking advice from financial planners, accountants, or attorneys to ensure your financial plan is well-structured for an economic downturn.
Continue to save and invest regularly. Even during a slowdown, it’s important to contribute to retirement accounts and other long-term investments. Markets often recover over time.
Most importantly, Take care of your mental and emotional health. Economic downturns can be stressful. Maintain a support system, practice stress management techniques, and seek professional help if needed.
