Less than three months ahead of mid-term congressional elections, the proportion of Americans reporting their financial situation was much worse or somewhat worse than a year ago rose to 38.6% last month, up from 37.6% in July. Those who expected their finances to get much worse or somewhat worse in the year ahead also climbed to 32.6% from 30.3%, Bloomberg reported.
Views on the labor market were mixed, while inflation expectations improved slightly.
Workers' perceived probability of losing their job in the next year fell to 13.8%, the lowest reading since February. The likelihood of leaving a post voluntarily — a positive indicator — rose for the second straight month to 19.5%, above its 12-month average. Both trends were driven by respondents with a high school degree at most and a household income under $100,000 per year.
At the same time, more respondents expected the overall unemployment rate would increase in the next year. The mean probability rose to 44.4%, the highest reading since April 2020. The increase was broad-based across age, education and income groups.
Additionally, the perceived chance of finding a job in three months if one were to lose their post fell to 45%.
Consumers expectations for inflation one and five years ahead were unchanged at 3.6% and 3%, respectively. Estimates for price increases in three years decreased slightly to 3.2% from 3.3% in July.
The New York Fed data comes days after a surprise increase in job gains in August signaled the labor market remained resilient despite uncertainties caused by the war against Iran and persistent inflation. Non-farm payrolls rose 162,000, above all estimates in a Bloomberg survey, while the unemployment rate held steady at 4.1%.
The data reinforced Fed officials' views of a stable job market. The Bureau of Labor Statistics will release August data for the producer price index on Thursday, followed by the consumer price index on Friday.
Policymakers are set to meet in Washington September 15-16, after leaving interest rates steady over five straight meetings. At their last gathering, three officials favored a quarter-point hike. A growing chorus of officials has questioned whether the current level of interest rates will be high enough to tame inflation.