The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the June 2024 Survey of Consumer Expectations, which shows that inflation expectations declined at the short- and longer-term horizons, but increased slightly at the medium-term horizon. Similarly, one-year-ahead expectations about home prices and one-year-ahead expectations about specific goods prices all declined.
Source: Federal Reserve Bank of New York
The main findings from the June 2024 survey are:
Inflation
- 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 inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year-ahead horizons, but rose at the five-year-ahead horizon.
- Median home price growth expectations decreased to 3.0% from 3.3%, back to the series 12-month trailing average.
- Median year-ahead expected price changes decreased for all goods in the survey, by 0.5 percentage point for gas to 4.3%, 0.5 percentage point for food to 4.8%, 1.7 percentage points for the cost of medical care to 7.4%, 2.6 percentage points for rent to 6.5%, and 3.1 percentage points for the cost of a college education to 5.3% (the series’ lowest level since December 2020).
Labor Market
- Median one-year-ahead expected earnings growth increased by 0.3 percentage point to 3.0%, above the series 12-month trailing average of 2.8% and the measure’s highest reading since September 2023.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—declined by 1.0 percentage point to 37.6% in June, just below the series 12-month trailing average of 37.7%.
- The mean perceived probability of losing one’s job in the next 12 months increased by 2.4 percentage points to 14.8%. Since the beginning of the year, the series has been moving within a relatively wide range between 11.8% and 15.7%. The mean probability of leaving one’s job voluntarily in the next 12 months also increased (by 0.9 percentage point) to 20.5%, above the series 12-month trailing average of 19.0%.
- The mean perceived probability of finding a job (if one’s current job was lost) increased to 53.4% from 52.2% in June, the measure’s highest value since January 2024 but well below its February 2020 pre-pandemic level of 58.7%.
Household Finance
- Median expected growth in household income declined 0.1 percentage point to 3.0% in June. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023 and remains above the February 2020 pre-pandemic level of 2.7%.
- 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. Consumers were slightly more polarized about future credit access with a larger share of respondents expecting tighter credit conditions a year from now, and a larger share of respondents expecting looser credit conditions.
- The average perceived probability of missing a minimum debt payment over the next three months rose by 0.3 percentage point to 12.3%, above the series 12-month trailing average of 12.1%.
- The median expected year-ahead change in taxes (at current income level) increased by 0.4 percentage point to 4.3%, above the series 12-month trailing average of 4.1%.
- Median year-ahead expected growth in government debt was unchanged at 9.3%.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 1.7 percentage points to 25.3%.
- 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.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now declined by 1.3 percentage points to 39.2%.
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.
