US Consumer Inflation Expectations Down in November from October as Gas/Food/Rent Price Expectations Retreat: NY Fed

NEW YORK (MaceNews) – US consumer inflation expectations fell back in November after bumping up in October from September, amid scaled-back expectations for gas/food/rent price rises, according to a survey from the Federal Reserve Bank of New York.

The median expectation for inflation one year ahead among survey respondents eased to 5.2% in November from 5.9% in October and 5.4% in September. The median one-year inflation expectation was down from its recent peak of 6.8% in June.

The median three-year inflation expectation declined to 3.0% in November from 3.1% in October and 2.9% in September. The median five-year inflation expectation decreased to 2.3% in November from 2.4% in October vs. 2.2% in September.

The lower one-year inflation expectations in part reflected softer expectations for gas prices, with the median expected increase in gas prices down 0.6 percentage point to 4.7% in November. Expectations for food price increases in the year ahead fell by 0.8 percentage point to 8.3% and declined 0.1 percentage point for rent.

The median expected change in the cost of medical care remained unchanged at 9.6%, while the median expected change in the cost of college education increased by 0.1 percentage point to 9.4%.
Median one-year-ahead expected earnings growth decreased by 0.2 percentage point to 2.8% in November. The decline was driven by respondents without a college degree and with annual household incomes below $100k. The series has ranged between 2.8% and 3.0% since September 2021.

Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.7 percentage points to 42.2%. The decrease was driven by respondents with annual household incomes above $50k.

The mean perceived probability of losing one’s job in the next 12 months decreased by 0.3 percentage point to 11.7%. The mean probability of leaving one’s job voluntarily in the next 12 months decreased by 0.9 percentage point to 18.6%. The mean perceived probability of finding a job (if one’s current job was lost) increased by 0.2 percentage point to 58.2%, its fourth consecutive monthly increase and the highest since February 2020.

Median expected growth in household income increased by 0.2 percentage point to 4.5% in November, a new series high. The increase was driven by respondents with no more than a high school education. Median household spending growth expectations decreased slightly to 6.9% from 7.0% in October.

Perceptions of credit access compared to a year ago deteriorated in November, with the share of households reporting it is harder to obtain credit than one year ago increasing to a new series high. Expectations for future credit availability were unchanged, suggesting that respondents expect credit access to tighten further. The average perceived probability of missing a minimum debt payment over the next three months rose to 11.8% in November from 11.6% in October, remaining comparable to rates in the period leading up to the pandemic.

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