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NY Fed Survey Reveals Highest Level of Concerns Regarding Credit Access in Over a Decade

Elinor Rozenvasser Updated: September 19, 2023 • 3 min read
credit card debt

Key Points:

  • Nearly 60% of survey respondents find it harder to obtain credit compared to a year ago.

  • The mean expectation of job loss in the coming year increased by 2 percentage points, reaching 13.8%, marking the highest level since April 2021.

  • This reveals heightened concerns over job security according to the same survey.

In an era marked by economic shifts and evolving financial landscapes, concerns over access to credit have reached unprecedented heights. According to a recent survey conducted by the New York Federal Reserve, the apprehension surrounding the ability to obtain loans, credit cards, and mortgages has surged to levels not seen in over a decade. This revelation underscores the challenges faced by American consumers in navigating the current financial terrain, characterized by higher interest rates and stringent lending standards.

In this article, we delve into the key findings of the survey and explore proactive measures individuals can take to secure their financial stability in these uncertain times.

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Rising Concerns About Credit Access

In today's economic landscape, American consumers are grappling with growing concerns about their access to credit. According to a recent survey from the New York Federal Reserve, nearly 60% of respondents believe that obtaining loans, credit cards, and mortgages has become more challenging compared to just a year ago. This marks the highest level of apprehension recorded since June 2013. These worries have been steadily on the rise since early 2022, coinciding with the Federal Reserve's decision to incrementally raise interest rates, a total of 5.25 percentage points over 11 rate hikes since March of the previous year.

The mean expectation of losing one's job in the upcoming year has increased to 13.8%, the highest level recorded since April 2021.

As the Fed addresses inflation concerns, the outlook remains mixed. Expectations for inflation in the short term (one year out) and medium term (five years out) have seen modest increases of 0.1 percentage point, standing at 3.6% and 3% respectively. However, the three-year outlook has slightly decreased to 2.8%. It's important to note that the Federal Reserve targets inflation at a steady 2%.

Outlook 1-year 3-years 5-years
Expectations 3.6% 2.8% 3.0%
Target Rate 2.0% 2.0% 2.0%

Assessing Essential Commodity Price Increases

Yet, when it comes to essential commodities, the outlook is notably different. Respondents anticipate a 0.4 percentage point increase in gas prices, bringing the figure to 4.9%. Medical care is expected to see a 0.8-point increase, rising to 9.2%. Additionally, food, college education, and rent are each projected to see a 0.1 to 0.2 point uptick, with figures of 5.3%, 8.2%, and 9.2% respectively.

In tandem with these financial concerns, worries about employment are also on the rise. The survey reveals that the mean expectation of losing one's job in the upcoming year has increased by 2 percentage points, now standing at 13.8%. This is the highest level recorded since April 2021, despite the current unemployment rate hovering at a relatively low 3.8%, just 0.1 percentage point above the rate from the previous year.

The Bottom Line

In times like these, it's crucial to take proactive steps to secure your financial stability. Getting your personal finances in order is paramount. Evaluate your existing debts, create a budget, and explore options for managing and consolidating your financial obligations. Consider seeking professional advice to navigate through these uncertain times. By taking control of your financial situation, you can safeguard your future against the uncertainties of the economic landscape.

If you're uncertain about where to begin or need guidance on managing your finances effectively, Lendstart is the hub to reach out and find assistance for all things finance. Now is the time to take charge of your financial well-being. Your future self will thank you.

Elinor Rozenvasser is a content writer and editor with a knack for finance. She holds a Bachelor's in Communications and Business from Reichman University, and has been swimming alongside finance specialists for over a decade. She's not your typical financial writer, though. She's more likely to use witty puns and sarcasm than jargon and technical terms. But don't let that fool you. She's still a whiz when it comes to explaining complex financial concepts in a way that anyone can understand. If there's any writer who can make finance fun and engaging, Elinor is your girl. She's sure to leave you laughing (and learning) long after you've finished reading her work.