Consumer inflation expectations increased in the short, medium and longer terms in October, according to the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released today. Household income growth expectations increased to a new series high, while households’ expectations about credit access one year from now worsened.
Median inflation expectations increased at both the one- and three-year-ahead horizons in October, by 0.5 and 0.2 percentage points, respectively, to 5.9% and 3.1%. Both increases were broad-based across age, education and income groups, according to the survey. Median five-year-ahead inflation expectations increased by 0.2 percentage points to 2.4%
The median expected growth in household income increased to a series high of 4.3% in October from 3.5% in September. The increase was most pronounced for those over the age of 60 and those with annual household incomes under $50,000. Median household spending growth expectations increased to 7% from 6%, with the increase most pronounced for respondents with no more than a high school education.
Perceptions of credit access dropped in October compared to a year ago, with the share of households reporting it is harder to obtain credit than one year ago increasing to a series high of 56.7%, according to the survey. Similarly, expectations for future credit availability also deteriorated in October, with the share of respondents expecting it will be harder to obtain credit in the year ahead increasing sharply.