Why Have Americans' Income Expectations Declined So Sharply?, Accessible Data
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Figure 1: Nominal Income Expectations
Series: Percent expecting higher income and percent expecting lower income
Horizon: 1978:Q1 to 2013:Q2
Description: Starting in 1978:Q1, a little over 50 percent of individuals expected their income to increase, while about 10 percent expected their income to decrease. Over time these, two series stayed relatively close their initial values. During recessions, the percent expecting higher income tended to drop and the percent expecting lower income rose, but prior to the most recent recession that started in early 2008, both series stayed about average. In 2008, the percent expecting lower income climbed, reaching its all-time high of almost 30 percent in 2009:Q2. Those expecting higher income also began to fall in the recession and reached its low point at just under 40 percent in 2011:Q1. The two series have recovered somewhat, and in 2013:Q2, a little over 45 percent expect an increase in income and just under 20 percent expect a decrease. The series cross at about the fourth quarter of 2008.
Note: The shaded bars indicate NBER recessions. The five shaded bars represent recessions that occurred from about early to mid-1980, approximately the fourth quarter of 1981 through the end of 1982, about the second half of 1990 to around the first quarter of 1991, approximately the second quarter of 2001 through the end of 2001, and about the first quarter of 2008 through about the second quarter of 2009.
Source: University of Michigan, Surveys of Consumers.
Figure 2: Income Expectations by Household Characteristics
By diffusion index for education
| Period | Diffusion index for: College | Diffusion index for: Some college | Diffusion index for: High school | Diffusion index for: Dropout |
|---|---|---|---|---|
| 2000 | 165.8 | 163.1 | 149 | 138.2 |
| 2001 | 155.8 | 152.2 | 143.1 | 134.1 |
| 2002 | 157.3 | 152.6 | 142.6 | 132 |
| 2003 | 153.9 | 154.2 | 139.9 | 124.5 |
| 2004 | 160.6 | 156.4 | 140.2 | 132.9 |
| 2005 | 160.5 | 151.3 | 139 | 132.5 |
| 2006 | 159.8 | 149.2 | 141.5 | 125.3 |
| 2007 | 158.3 | 153.4 | 140.4 | 129.5 |
| 2008 | 146.3 | 138.2 | 130.5 | 122.9 |
| 2009 | 125.4 | 117.9 | 105.6 | 106.4 |
| 2010 | 133.3 | 119.7 | 109.8 | 94.9 |
| 2011 | 129.6 | 114.1 | 106.7 | 96 |
| 2012 | 133.6 | 121.7 | 118.2 | 116.8 |
Note: Diffusion index for each group is calculated as the percentage of households expecting higher income minus the percentage of households expecting lower income plus 100.
Source: University of Michigan, Survey of Consumers.
By diffusion index for age
| Period | Diffusion index for: Under 30 | Diffusion index for: Age 30-59 | Diffusion index for: Age 60 and over |
|---|---|---|---|
| 2000 | 177.3 | 164.7 | 129.2 |
| 2001 | 168.8 | 157.3 | 119 |
| 2002 | 168.2 | 156.5 | 123.4 |
| 2003 | 169.8 | 154.8 | 119.4 |
| 2004 | 172.8 | 158.8 | 127.2 |
| 2005 | 170.7 | 159.1 | 121.8 |
| 2006 | 168.3 | 157.5 | 124.9 |
| 2007 | 168.5 | 158.7 | 127.2 |
| 2008 | 162.8 | 147.9 | 115.1 |
| 2009 | 142.5 | 125.4 | 98.6 |
| 2010 | 156 | 133.3 | 96.2 |
| 2011 | 152.7 | 129.7 | 95.7 |
| 2012 | 155.2 | 137.1 | 105.9 |
Note: Diffusion index for each group is calculated as the percentage of households expecting higher income minus the percentage of households expecting lower income plus 100.
Source: University of Michigan, Survey of Consumers.
Figure 3: Decomposition of Change in Expectations
Change in diffusion index
| Period | Change in diffusion index for: Experiences | Change in diffusion index for: Characteristics | Change in diffusion index for: Unexplained |
|---|---|---|---|
| 2007-2009 | -21.1 | -1.1 | -10.7 |
| 2009-2012 | 8 | -1.2 | 1.6 |
Source: University of Michigan, Survey of Consumers.