Why Have Americans' Income Expectations Declined So Sharply?, Accessible Data

Accessible version of figures

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.

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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.

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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.

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