NEW YORK— Americans’ expectations for inflation over the short term eased in January while views on the labor market showed slight improvement, according to a survey released by the Federal Reserve Bank of New York.
The New York Fed’s Survey of Consumer Expectations, fielded Jan. 2–31, found that U.S. households’ median expected inflation one year ahead fell to 3.1%, down 0.3 percentage point from December. Inflation expectations for three and five years out remained unchanged at 3.0%.
At the same time, respondents expressed modestly more confidence in job prospects and earnings growth, although some measures of economic sentiment deteriorated.
Key Findings
Key survey findings include:
Inflation Expectations
- One-year ahead median inflation: 3.1%, down 0.3 point.
- Three- and five-year ahead inflation: 3.0%, unchanged.
- Home-price growth expectations: 2.9%, lowest since mid-2023.
Year-Ahead Price Change Expectations
- Gas: 2.8%
- Medical care: 9.8%
- Rent: 6.8%
- Food: 5.7% (unchanged)
- College education: 9.0% (up 0.7 point).
Labor Market Outlook
- One-year earnings growth expectation: 2.7%, up 0.2 point.
- Mean probability unemployment rises over next year: 41.9%, up slightly.
- Mean probability of job loss in next 12 months: 14.8%, down modestly.
- Likelihood of finding a new job within three months if one loses a job: 45.6%, up 2.5 points.
Household Finances and Sentiment
- Expected growth in household income: 2.9%, slightly below year-ago averages.
- Median household spending growth expectations: 4.9%.
- Perceived difficulty in future credit access rose.
- Average probability of missing a debt payment in the next three months fell to 13.7%.
- Expectations for higher interest rates on savings increased to 25.8%.
“Perceptions of current household financial situations and outlooks weakened, with more respondents saying they are worse off now and expect worse conditions ahead,” the New York Fed said.
The survey also found the average probability that U.S. stock prices will be higher in a year rose to 39.1%.
The Survey of Consumer Expectations is a nationally representative, Internet-based panel of about 1,200 U.S. households that tracks outlooks on inflation, job prospects, income, spending and credit access over time.
