Monday, April 13, 2015

Fed SCE Survey: People That Make Over $100K See Lower Inflation And Higher Earnings Growth Ahead

The New York Fed’s Survey of Consumer Expectations (SCE) was published today. The results from today show that expectations about home prices, earnings growth and household spending have rebounded somewhat compared to February. 

What Makes This Report Special
The SCE is known for being one of the most comprehensive reports available on consumer expectations with interviews from approximately 1200 consumers on a rolling panel. In addition to collecting data about food, gas, housing, education and medical care it provides information about how the country views its job prospects, access to credit, layoff risk, reemployment prospects, earnings growth and expectations round future spending. Expectations are available by age, income, education, geography, and ability to work with numbers. The most interesting insights were around inflation and earnings expectations.

Inflation Expectations
People who make over $100K think there's less inflation one-year ahead than people who make under $50K. The same is true for people with a BA degree or higher. People under the age of 40 see less inflation one year out than people over the age of 60, and people in the Midwest see inflation rising less than those in the rest of the country.
Inflation From Survey of Consumer Expectations - March 2015, FRB

Earnings Expectations
Earnings expectations were also varied. People under the age of 40 had higher expectations than people over 60. People with a BA degree or higher expect earnings to grow at a higher clip than those without a college or high school diploma. The widest dispersion is based on income, with people making over 100K having a higher expectation of earnings growth than those making less than 50K. Finally, people in the Northeast and South have higher earnings expectations than those in the Midwest and West.
Earnings Growth From Survey of Consumer Expectations - March 2015, FRB
What To Look For Tomorrow, Tuesday 4/13
Look for Advance Retail Sales to be announced tomorrow at 08:30am along with the Producer Price Index.  Business Inventories will be announced later at 10:00.

If you like what you're reading, please join my mailing list to receive blog posts and updates as they occur. If you're an investor with all of your assets tied up in the stock market and cash, you might want to consider a few diversification strategies. Gold is the oldest asset in the world and it's inflation proof. Bitcoin is the gold standard for the cryptocurrency world, which is the fastest growing asset class in the world. Diversifying your portfolio into one or both of these assets can help to insure your portfolio against a stock market crash or inflation. Most importantly, it can help to safeguard the gains you've made over the last 10 years.

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