In general, most consumers expect to spend more on essential purchases and housing costs in the year ahead, while fewer anticipate increasing their spending on discretionary items, such as restaurant meals, entertainment and vacations. During follow-up interviews, many consumers mentioned ways they are adjusting their consumption, including by reducing spending or putting off buying big-ticket items. One respondent said, “You don’t want to make as many of those big purchases just because you don’t know how secure your job is. Anything could really change. Just saving more, less spending.”
Even though consumers expect interest rates to stay elevated, housing market indicators remain close to survey averages (Chart 7). Compared with last quarter, fewer consumers this quarter are planning to move or sell, while intentions to buy a home are unchanged at survey average levels. Newcomers continue to report stronger intentions to buy a home over the next year than other consumers do.
