Consumer inflation expectations declined in the short and longer terms, but increased slightly in the medium term, according to the Federal Reserve Bank of New York’s most recent Survey of Consumer Expectations. One-year-ahead expectations about home prices and specific goods prices declined.
Median one- and five-year-ahead inflation expectations both declined by 0.2 percentage point in June to 3.0% and 2.8%, respectively. In contrast, the median three-year ahead inflation expectations increased 0.1 percentage point to 2.9%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) remained unchanged at the one-year ahead horizon, declined at the three-year-ahead horizon, and rose at the five-year ahead horizon.
Median expected growth in household income declined 0.1 percentage point to 3.0% in June. Median household spending growth expectations rose by 0.1 percentage point to 5.1%. The series had remained stable between 5.0% and 5.3% since August 2023 and remains well above its February 2020 pre-pandemic level of 3.1%. Perceptions of credit access compared to a year ago deteriorated slightly with a smaller share of respondents reporting that it is easier to obtain credit than 12 months ago.
Perceptions about households’ current financial situations deteriorated slightly with more respondents reporting being worse off than a year ago, and fewer respondents reporting being better off. Expectations about households’ year-ahead financial situations were less dispersed with fewer respondents expecting to be better off a year from now ago, and fewer respondents expecting to be worse off.
