NY Fed: Inflation Expectations Decline, Earnings Expectations Flat

Inflation expectations decreased slightly at both the one year ahead and three year ahead levels, while earnings growth expectations were flat according to the New York Fed’s September Survey of Consumer Expectations (SCE).


Median one-year ahead inflation expectations dropped 17 basis points to 2.79 percent in August, the second lowest reading of the year. The median three-year ahead inflation expectations fell 9 basis points to 2.87 percent.

Consumer expectations for changes in home prices fell also in August, with consumers expecting prices to rise 3.03 percent over the next year, a 12 basis point decrease from July’s reading, and down from 3.46 percent a year ago.

One year earnings growth expectations were virtually unchanged from July, increasing by 2 basis points to 2.45 percent, while median uncertainty regarding earnings growth fell 15 basis points to 1.85 percent.

Consumers were less optimistic in their expectations for credit availability a year from now, as 25.55 percent of consumers surveyed expect credit to be somewhat harder to obtain a year from now, a 1.56 percent increase from last month. However, the share of consumers that believe it will be much harder to obtain credit one year from now declined from 8.05 percent in July to 6.54 percent in August.

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