Consumers are growing more pessimistic about their ability to stay current on their debts, a warning sign for the accounts receivable management industry as the New York Fed’s May Survey of Consumer Expectations showed deterioration across nearly every measure of household financial health.
The average perceived probability of missing a minimum debt payment over the next three months rose 1.2 percentage points to 12.6%, with the increase concentrated among households with at most a high school degree and annual incomes below $100,000. That demographic detail matters for collection agencies and creditors: the consumers most likely to anticipate trouble are the ones already overrepresented in delinquency pipelines.
The credit picture is darkening on both ends. Expectations for future credit availability deteriorated, with fewer respondents expecting it will be easier to obtain credit in the year ahead. Tighter credit access historically pushes more consumers toward delinquency rather than refinancing their way out of trouble.
Perhaps most striking, the share of households reporting a worse financial situation than a year ago hit its highest level since January 2023, and the net share expecting a better financial situation a year from now fell to its lowest reading since October 2022.
The labor market signals reinforce the concern. The mean perceived probability of losing one’s job in the next 12 months ticked up to 15.1%, while the perceived probability of finding a new job if the current one were lost dropped 2.3 percentage points to 43.7%, the lowest reading since December 2025. Job loss paired with a weak rehiring outlook is the classic recipe for charge-off growth two to three quarters down the road.
There were a few brighter spots. Short-term inflation expectations eased slightly to 3.5%, and median household income growth expectations held steady at 2.8%. But rent expectations jumped 1.4 percentage points to 7.4%, and food price expectations climbed to 5.8%, meaning the essentials squeezing lower-income budgets are expected to keep squeezing.
