Americans Scale Up Spending Plans for 2021, Fed Survey Shows
A pedestrian carries a Muji USA Ltd. shopping bag while crossing a street in the Soho neighborhood of New York, U.S. (Photographer: Nina Westervelt/Bloomberg)

Americans Scale Up Spending Plans for 2021, Fed Survey Shows

Americans are scaling up spending plans for the year ahead, according to a Federal Reserve Bank of New York survey.

U.S. households in November expected their spending to rise 3.7% over the next 12 months, results from the New York Fed’s monthly Survey of Consumers published Monday showed. That compared to a 3% increase expected the prior month and marked the biggest expected increase in spending recorded in the survey since 2016.

The jump was driven primarily by respondents with annual incomes under $50,000, the New York Fed said.

Fiscal aid authorized by Congress and the White House earlier in the year -- to shield Americans from the financial impact of the coronavirus pandemic -- boosted household savings. Fed officials including Chair Jerome Powell have warned lawmakers in recent weeks that with cases on the rise, the economic recovery could stall without an additional round of relief.

Survey respondents marked up plans for spending even as they reported greater pessimism about their personal finances overall in the year ahead.

The survey also found that household inflation expectations one year ahead rose 0.2% to 3% in November and by 0.1% three years ahead to 2.8%.

©2020 Bloomberg L.P.

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