US Consumer Inflation Expectations Hit 3-Year Low

New York Fed survey reveals decreased expectations for earnings growth and spending, alongside an optimistic outlook for credit access and overall financial health.

• US consumers' inflation expectations for the next year have fallen to the lowest level in three years, according to the Federal Reserve Bank of New York's December Survey of Consumer Expectations.
• Median inflation expectations declined across all three time horizons tracked in the survey — one, three and five years ahead — with the nearer-term categories landing at levels not seen since 2020.
• Expectations for earnings growth and spending growth have slightly decreased, while the mean perceived probability of losing one's job in the next year has marginally decreased.
• Expectations about credit access and overall financial health trended to the optimistic side, with fewer respondents feeling worse off than a year ago.
• The probability of an interest-rate increase in the next 12 months fell to 25.9%, the lowest since November 2021.

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