American consumers see debt delinquency risk rising, higher long-term inflation: NY Fed

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Capitalist Pig hedge fund manager Jonathan Hoenig weighs in on market rallies, his concern for everyday Americans amid inflation, and his stock pick. 

American consumers' expectations about the risk of debt delinquency rose to the highest level in more than four years last month, while concerns about elevated inflation over the longer-term also increased, according to a report released Tuesday by the Federal Reserve Bank of New York.

The New York Fed's Center for Microeconomic Data found that in its Survey of Consumer Expectations for September, the average probability of consumers not being able to make a minimum debt payment rose for the fourth consecutive month to 14.2% – the highest level since April 2020 when it was 16.1%. 

That suggests some Americans are facing increased budget pressures as they look to manage their borrowing. At the same time, consumers' perceptions and expectations for credit access improved in September for the fourth straight month.

Consumers' inflation expectations were unchanged at 3% over the next year, but increased from 2.5% to 2.7% at the three-year horizon, and from 2.8% to 2.9% at the five-year horizon.

INFLATION MEASURE CLOSELY WATCHED BY THE FED FELL TO 2.2% IN AUGUST

Consumers see inflation remaining elevated over the three- and five-year time horizons, per the latest New York Fed report. (Photo by FREDERIC J. BROWN/AFP via Getty Images / Getty Images)

The probability of losing one's job in the next 12 months was flat in September when compared with August, though the probability of voluntarily leaving a job ticked up from 19.1% in August to 20.4% in September, the highest level since July.

Expectations of a higher unemployment rate one year from now approached the lowest level