According to the Federal Reserve (Fed) Bank of New York, consumer inflation expectations ticked higher once again, and ongoing employment expectations also decayed.
All surveyed metrics remain reasonably within near-term averages, but a building sense of dread continues to weigh on consumers at the aggregate level underlines how much the Trump administration’s roughshod policy approach, specifically where trade and business are concerned, is having a detrimental effect on the US’s domestic economy.
Key highlights
- Median inflation expectations rose to 3.2% over the next 12 months and remained unchanged at 3.0% and 2.9% for the 3-year and 5-year time horizons, respectively.
- Consumers saw only a 44.9% chance of finding a new job quickly if they lost their current employment, a sharp decline of 5.8%.
- Expectations that the US unemployment rate will be higher by this time next year rose to 39.1%, and individuals’ expectations of becoming unemployed also rose to 14.5%.
- Median expected growth in household income remains unchanged as consumers give up on hopes for rising earnings by the time wages hit bank accounts. Median household spending expectations, meanwhile, rose 5.0%.
