NY Fed Consumer Survey Reveals Families Are Preparing for a Recession, but Remain Bullish on Stocks
Yesterday, the New York Federal Reserve released their Survey of Consumer Expectations for the month of April. In their own words the data shows a “considerable deterioration in households’ expectations about most economic outcomes.”
According to the survey, the average consumer believes that over the next 12 months they …
Are more likely to default on an outstanding debt
Will face a tighter credit and lending environment
Will see their household income grow slower/shrink
Are more likely to lose their jobs
Source: New York Federal Reserve, Mirador Capital Partners Research
Average Joes are clearly preparing for an economic recession of some sort. Regardless, starting in February more and more of them have found confidence that the stock market will cruise higher (Fig 1). Unfortunately, we are not entirely clear on where that confidence is coming from.
Maybe Liz Ann Sonders, Chief Investment Strategist of Charles Schwab, has an answer (Fig 2).
Source: Charles Schwab; Bloomberg; SentimenTrader, as of 5/1/2020
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