American households are growing more pessimistic about their personal finances, with inflation and higher daily expenses still squeezing budgets. In the Federal Reserve Bank of New York's May survey, about 44% of consumers reported being financially about 44% than they were a year ago, the highest level since January 2023.
The outlook for the coming year is also weak. Just 22.9% of households expect their financial situations Just 22.9%, while 36% expect things to get worse. That leaves the net share of Americans expecting better finances at its lowest level since October 2022.
The strain shows up in household budgets, with oil and gas prices still elevated. Wage growth rose at a 3.4% annual rate in May, below the previous month's 3.8% inflation rate. The resulting squeeze on purchasing power has pushed credit card delinquencies to their highest level since 2011.
Workers are also showing more anxiety about their employment stability over the next 12 months:
- About 15% of respondents believe they could lose their current jobs.
- Consumers' perceived probability of finding a new role if they become unemployed fell to its lowest level since December 2025.
Despite the broader unease, overall consumer inflation expectations for the year ahead stayed at 3.5%. Households still expect food prices to rise by 5.8% and rent to jump by 7.4% over the next year. Consumers will get another read on price pressures on Wednesday, when the May Consumer Price Index is expected to show headline inflation at 4.2%.