US: Stable consumer inflation expectations and spending - Nomura

Analysts at Nomura notes that the NY Fed’s Consumer Expectations survey indicated stable consumer inflation expectations in August.

Key Quotes

“Year-ahead median inflation expectations remained steady at 3.0%, up marginally from 2.98%, previously. Three-year-ahead expectations inched up to 3.0% from 2.88%.”

“The three-year-ahead expectations of consumers’ with high-numeracy were essentially unchanged at 3.0%, highlighting steady survey-measured inflation expectations. As retail gasoline prices stabilized, one-year-ahead expected gasoline prices dropped three months in a row.”

“In addition, expectations about household income and spending growth were stable while financial situation expectations improved. This result appears consistent with firm consumer fundamentals.”

“Consumer credit: Consumer credit rose $16.6bn to $3.92tn in July with a modest downward revision to an increase in June. Both revolving and non-revolving credit rose at healthy paces and appears consistent with strong consumer spending growth in Q3. Healthy consumer spending during the quarter was likely supported by the strong labor market and steady income gains.”