3%

That’s how much consumers expect their income to grow over the next year, according to the June 2024 Survey of Consumer Expectations from the New York Fed—a 0.3 percentage point increase from May and the highest level since September 2023. This rise in earnings expectations is coupled with a decline in both short- and long-term inflation forecasts and a decrease in annual home price growth expectations to 3%.  While the survey highlights these positive trends, it also suggests some concerns. More respondents feel worse off financially compared to a year ago, and fewer feel they are better off. This mixed sentiment creates a complex landscape for banks, which must balance the potential for increased consumer spending with the realities of moderated inflation and housing market adjustments.