Median inflation expectations fell at all three horizons in October.
Source: Federal Reserve Bank of New York
NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the October 2024 Survey of Consumer Expectations, which shows that households’ inflation expectations declined slightly at the short-, medium-, and longer-term horizons. Labor market expectations improved with households reporting a lower likelihood of higher unemployment and job loss, and a higher likelihood of finding a job if they were laid off. Perceptions of credit access and expectations for future credit access both improved in October, and households reported a lower likelihood of missing a minimum debt payment over the next three months.
The main findings from the October 2024 survey are:
Inflation
- Median inflation expectations fell at all three horizons in October. One-year-ahead inflation expectations declined by 0.1 percentage point to 2.9%, three-year-ahead inflation expectations declined by 0.2 percentage point to 2.5%, and five-year-ahead inflation expectations declined by 0.1 percentage point to 2.8%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) declined at all three horizons.
- Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the one-year horizon and declined at the three- and five-year horizons.
- Median home price growth expectations were unchanged at 3.0% in October. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
- Year-ahead commodity price expectations declined by 0.2 percentage point for gas to 3.2%, 0.2 percentage point for food to 4.3%, 0.2 percentage point for the cost of college education to 5.7%, and 0.4 percentage point for rent to 5.9%. The expected cost of medical care also declined by 0.8 percentage point to 5.8%, the measure’s lowest reading since January 2020.
Labor Market
- Median one-year-ahead earnings growth expectations were unchanged at 2.8% in October. The series has been moving within a narrow range between 2.7% and 3.0% since January 2024.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.7 percentage points to 34.5%, the measure’s lowest reading since February 2022.
- The mean perceived probability of losing one’s job in the next 12 months decreased by 0.3 percentage point to 13.0%. This decrease was most pronounced for respondents under the age of 40 and those with a college degree. The mean probability of leaving one’s job voluntarily in the next 12 months increased by 0.1 percentage point to 20.5%.
- The mean perceived probability of finding a job (if one’s current job was lost) increased by 3.3 percentage points to 56.0%, the measure’s highest reading since October 2023. This increase was most pronounced for respondents with a high school education or less.
Household Finance
- The median expected growth in household income was unchanged at 3.0% in October. The series has been moving in a narrow band between 2.9% and 3.3% since January 2023.
- Median household spending growth expectations were unchanged at 9% but remain well above pre-pandemic levels.
- Perceptions of credit access compared to a year ago improved in October, with a decreasing (increasing) net share of households reporting it is harder (easier) to obtain credit than one year Expectations for future credit availability also improved in October.
- The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.3 percentage point to 13.9%, the first decrease since May 2024. The decrease was most pronounced for those under the age of 40. This series remains above its 12-month trailing average of 12.6%.
- The median expected year-ahead change in taxes at households’ current income level was unchanged at 4.0%.
- Median year-ahead expected growth in government debt increased by 0.5 percentage point to 8.5%.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.5 percentage point to 24.6%.
- Perceptions about households’ current financial situations compared to a year ago improved in October, with a rising share of households reporting a better situation relative to those reporting a worse situation. Similarly, year-ahead expectations about households’ financial situations improved in October.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 1.2 percentage points to 39.1%.
About the Survey of Consumer Expectations (SCE)
The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers’ outlooks. Expectations are also available by age, geography, income, education, and numeracy.
The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here, the interactive chart guide, and the survey questionnaire.
