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NY Fed Survey Shows Increase in Long-Term Inflation Expectations
Consumers have little confidence that the Federal Reserve will meet its 2% target for inflation anytime soon, according to the The Federal Reserve Bank of New York’s February 2024 Survey of Consumer Expectations (SCE), which surveys 1,300 household heads nationwide. Median inflation expectations remained unchanged at 3.0% over the next 12 months, increased to 2.7% from 2.4% at the three-year-ahead horizon and increased to 2.9% from 2.5% at the five-year-ahead horizon.
At the same time, moderating consumer expectations for some key inflation indicators offered cause for optimism. Median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care, its lowest reading since September 2020; decreased by 0.1 percentage point to 5.8% for the cost of a college education; decreased by 0.3 percentage point for rent to 6.1%, its lowest reading since December 2020; and remained flat for food at 4.9%.
However, even as the latest national jobs report showed 275,000 positions added during February, the SCE showed rising concern over unemployment. The perceived probability of losing one’s job in the next 12 months increased by 2.7 percentage points to 14.5%. The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%.
- ◦Economy
