Overview
- Year-ahead inflation expectations rose to 3.4% in December, while three- and five-year expectations held at 3%.
- The perceived chance of finding a job if unemployed fell to 43.1%, the lowest since the survey began in 2013, with pessimism concentrated among households earning under $100,000.
- Consumers put the probability of missing a minimum debt payment at 15.3%, the highest since April 2020, and reported harder access to credit.
- Respondents were more upbeat about their current and expected finances even as job-market signals were mixed, with higher perceived layoff risk and fewer expecting to quit voluntarily.
- After cutting rates in December to a 3.50%–3.75% range, Fed officials are watching expectations closely, and Philadelphia Fed President Anna Paulson said modest further adjustments later this year could be appropriate if the economy evolves as expected.