(Bloomberg) -- U.S. consumers said they expected to see the fastest wage growth in several years when polled in January, according to a monthly Federal Reserve Bank of New York survey.
Consumers polled expected earnings to rise 2.73 percent in the coming year, the most since data collection began in 2013, according to results of the New York Fed’s Survey of Consumer Expectations released on Monday. January was only the third month in the survey’s 56-month history in which expected wage growth topped expected consumer price inflation, which fell slightly, to 2.71 percent.
The data jibe with a Feb. 2 Labor Department report which showed that U.S. average hourly earnings rose 2.9 percent from a year earlier in January, marking the fastest pace of the expansion. Fed officials are looking for clues about whether or not wage growth will continue to accelerate, and eventually put upward pressure on consumer prices, as they contemplate raising interest rates several times this year under new Chairman Jerome Powell.
The Labor Department report triggered the most severe stock market volatility in years, with some investors reassessing whether equity valuations could handle a steeper rise in interest rates that a pickup in inflation could push the Fed to deliver. The yield on 10-year U.S. Treasury notes has risen almost half a percentage point since the beginning of the year.
Results of the New York Fed poll also showed 39 percent of consumers felt their personal finances were in better shape than a year earlier, and 46 percent expected to be in better shape in a year, both marking the highest levels in data from 2013.
©2018 Bloomberg L.P.