Minneapolis CNN —
According to a survey by the Federal Reserve Bank of New York released Tuesday morning, Americans have already started to rein in their spending – and expect it to be slightly more so this year.
Monthly household spending growth, after hitting a series high of 9% in August, fell to 7.7% in December, according to the New York Fed’s latest household spending survey.
However, according to the survey released every four months, this is still well above the December 2021 and pre-pandemic levels of 5.1% and 2.5% respectively.
Nevertheless, the survey showed a slight decline in major purchases: the number of respondents who bought a vehicle fell to its lowest level since August 2020, as auto sales plummeted during the pandemic.
The survey showed that the decline in spending activity is expected to continue this year.
The median expected growth in total monthly household spending for 2023 was 4% in December, up from 4.4% in August and the lowest since April 2021.
Despite an expected drop in overall spending, the likelihood of buying an expensive gadget or electronics product in the next four months increased compared to August, while it fell for furniture, home repairs, vacations, vehicles and homes, the survey found.
A slightly larger proportion of survey respondents also indicated that they would use an unexpected 10% pay rise to pay off debt.
The latest review of spending activity and expectations comes on Wednesday ahead of a key economic report, the Commerce Department’s final outlook on retail sales for 2022. Economists expect December sales to fall 0.8% mom, according to consensus estimates refinitive . That would be a bigger monthly drop than November’s sharp 0.6% drop. Retail sales are not adjusted for inflation.