Consumers expect to make less money and spend less money, but fewer consumers expect to miss a debt payment in the next three months, according to data released yesterday by the Federal Reserve Bank of New York. The data paints a picture of how consumers feel they are managing their finances now and what their expectations are about being able to manage their finances in the future. For companies in the accounts receivable management industry, data like this can influence collection strategy and the content of conversations had with individuals when trying to collect on debts.
The average perceived probability of missing a debt payment during the next three months dropped to 9.3% in October, from 10.7% in September. The figure remains well below the 2019 average of 11.5%, the New York Fed reported. That figure peaked in April 2020 at 16%, likely due to the onset of the coronavirus pandemic, and has dropped in four of the six months since that high-water mark.
The number of individuals who expect to be separated from their job — voluntarily or otherwise — also declined in October, and the number who expect to leave their job voluntarily is at its second-lowest point in six years, indicating that people who have a job are not looking to see if the grass is greener somewhere else.
Overall, the number of people who think their financial situation will be “much better off” a year from now was 3.13%, the second-lowest point in the past six years. Conversely, only 1.82% of participants in the survey expect their financial situation to be “much worse off” a year from now, compared with 1.33% who felt that way in October 2019.
