NY Fed: Inflation and Earnings Expectations Decline

Inflation expectations decreased for the third consecutive month at both the one-year ahead and three-year ahead levels, as earnings growth expectations also declined according to the New York Fed’s October Survey of Consumer Expectations (SCE).

Median one-year ahead inflation expectations fell 6 basis points to 2.73 percent in September, tying April’s reading for the lowest of the year. Median three-year ahead inflation expectations fell 3 basis points to 2.84 percent, the lowest reading in two years.

Consumer expectations for changes in home prices increased slightly in September, as consumers expect home prices to rise 3.09 percent over the next year, a six basis point increase from August’s reading but down from a 3.46 percent expectation last year.

One year earnings growth expectations fell 26 basis points to 2.19 percent, while earnings growth uncertainty ticked up 12 basis points to 1.97 percent.

Consumer were less optimistic in their expectations for credit availability a year from now, as 28.79 percent expect credit to be somewhat harder to obtain a year from now, a 3.24 percent increase from last month’s reading. However, the share of consumers expecting it to be much harder to obtain credit a year from now, fell from 6.54 percent in August, to 6.40 percent in September, and the portion of consumer expecting it to be much easier to obtain credit one year from now increased from 0.81 percent to 0.90 percent.

Read the NY Fed Release.