Fed Chair Janet Yellen keeps citing consumer confidence and jobs as reasons consumer spending and inflation will pick up.

Curiously, the New York Fed Survey on Consumer Spending Expectations keeps trending lower and lower, despite survey-high expectations for wage growth.

The report for July 2017 was released today. I downloaded the survey results and produced the following charts.

Household Spending Projections

Household Income Projections

Projection Comments

• Income projections are volatile but at least they are trending higher across the board.
• Spending projections are less volatile and trending lower at every level.
• At the 25th percentile level, a group that no doubt spends every cent they make, spending expectations are zero. Those projections were in negative territory in April.

Fed Chair Janet Yellen does not believe the Fed’s own reports. Instead, she relies on consumer confidence numbers that tend to track the stock market or gasoline prices more than anything else.

Perhaps New York Fed President William Dudley does believe in the report.

Earlier today I commented NY Fed President Wants Consumers to Tap Home Equity: Didn’t We Try That Before?

Mike “Mish” Shedlock