Consumer inflation expectations were little changed in the short, medium and longer terms in January, according to the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released today. At the same time, household income growth expectations dropped substantially but remained above their pre-pandemic levels.
Median inflation expectations remained unchanged at the one-year-ahead horizon at 5%, decreased by 0.2 percentage point at the three-year-ahead horizon to 2.7%, and increased by 0.1 percentage point at the five-year-ahead horizon to 2.5%, according to the survey. The median expected growth in household income dropped by 1.3 percentage points to 3.3%, which was the largest one-month drop in the nearly 10-year history of the series. Still, the January reading was only slightly below its 12-month trailing average of 3.5% and remained well above its pre-pandemic levels.
Perceptions of credit access compared to a year ago improved in January, with the share of households reporting it is easier to obtain credit than one year ago increasing. Similarly, respondents were more optimistic about future credit availability, with the share of households expecting it will be easier to obtain credit a year from now also increasing.