(Bloomberg) -- Perceptions among American households that they might become delinquent on debts increased last month to the highest levels since April 2020, according to a Federal Reserve Bank of New York survey.
The anticipated probability of missing a minimum debt payment over the next three months rose to 14.2% in September, marking the fourth straight month of increases, according to results of the New York Fed’s monthly Survey of Consumer Expectations published Tuesday. The rise was driven by middle-aged respondents.
The data add weight to the idea that the US economy is becoming increasingly split as some households do well while others falter. A rising stock market has helped propel overall household net worth to a record over the past few months, but many Americans do not own significant amounts of equities and have been accumulating debt in recent years amid elevated interest rates.
The increased odds of delinquency were mirrored in a broader deterioration of perceptions about households’ current financial situations, with fewer consumers reporting being better off and more reporting being worse off than a year ago, according to the survey.
Still, respondents also reported a better outlook for the year ahead, with more saying they expect financial situations and credit access to improve amid a stronger job market, higher stock prices and lower interest rates.
Inflation expectations meanwhile were little changed on the whole, with a measure of expected inflation a year from now holding steady at 3% and longer-term measures rising slightly but remaining below that level. The median respondent saw gasoline up 3.4% over the next 12 months, the least in two years. Expected food inflation ticked higher after falling in August to the lowest level since pre-pandemic, while expectations for rental inflation moderated to 6.3%.
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