US Consumers Expect Higher Inflation In Next Few Years: NY Fed Survey
(RTTNews) - U.S. consumers' inflation expectations for the next three years increased sharply in December, while unemployment concerns were mixed, results of a monthly survey by the Federal Reserve Bank of New York showed on Monday.
Median inflation expectations for the one-year horizon were unchanged at 3.0 percent but they increased to 3.0 percent from 2.6 percent for the three-year horizon. Price growth expectations for the 5-year horizon declined to 2.7 percent from 2.9 percent.
The monthly University of Michigan survey showed on Friday that the year-ahead inflation expectations soared to 3.3 percent in January from 2.8 percent in December, reaching the highest level since May 2024.
The UoM survey also showed that long-run inflation expectations surged to 3.3 percent in January from 3.0 percent in December.
The NY Fed survey showed that households expressed more uncertainty regarding future inflation outcomes at the one- and three-year horizons and less at the five-year horizon.
Consumers' earnings growth and unemployment expectations for the next 12 months eased. However, their hopes of finding a job in the event of losing the current one declined sharply, to the lowest reading since April 2021.
Households' income growth expectations decreased, while they expect to spend more. There was a sharp increase in the perceived probability of missing a minimum debt payment over the next three months. The level equaled the September 2024 reading, which was the highest level of the series since April 2020, the survey said.