US Consumers Expect Stable Inflation of 3.6% for Year, Per New York Fed Survey
The Federal Reserve's New York survey found that US consumers expect inflation to remain at 3.6% for the next year, despite mixed signals regarding labor market conditions.
Consumers in the United States kept their inflation expectations steady between July and August, according to the Federal Reserve Bank of New York survey released on Tuesday. The average expected rate for the upcoming year is 3.6%, rising from 2.9% in June. For a five-year horizon, consumers predict prices will increase by an average of 3%. Gasoline prices remain a primary driver of these estimates, with the median price expectation jumping 1.7 percentage points to 4.6% for next year, largely attributed to the conflict in Iran. While inflation projections are unchanged, views on the labor market showed divergence. The likelihood of unemployment exceeding 5% over the next year increased to 44.4%, representing its highest reading since April 2020. Conversely, the perceived chance of losing one's job dropped significantly to a level not seen since February.
