Consumer Concerns About Credit Access Hit Decade High
September 11, 2023
American consumers are worried about their access to consumer loans, credit cards, and mortgages amid high interest rates and tighter lending standards, according to a new report from the New York Federal Reserve.
The number of surveyed Americans who say getting loans and lines of credit today is harder today than it was a year ago jumped to nearly 60%, the highest level on record in a data series that goes back to 2013.
The portion of respondents worried about credit access has been steadily rising since early 2022, around the time that the Federal Reserve began hiking rates in an effort to combat inflation. Since then, they have increased rates 11 times, bringing the key federal funds interest rate 5.25 percentage points higher.
On the inflation front, the survey found a mixed outlook on consumer expectations. Consumer expectations for where inflation will be one year from now ticked up slightly by 0.1% for the month, as did the expectation for inflation over the next five years, putting them at 3.6% and 3%, respectively. Both are well above the Fed’s 2% target.
While the overall inflation expectation was muted, when broken down by various components, consumers still expect prices to climb. The survey showed that respondents’ expectations for gas prices rose by 0.4 to 4.9%. Medical care was up 0.8 to 9.2%, a 0.1 point increase for food brought the total to 5.3%, and expectations for higher prices for education and rent both climbed 0.2 points, to 8.2% and 9.2%, respectively.
The survey also found growing worries about the job market, as the number of respondents expecting to lose their jobs in the next 12 months climbed 2 percentage points to 13.8%, the highest level since early 2021.