NY Fed Jan. survey of consumer expectations shows one year inflation 3.0% vs 3.0% last

February 10, 2025 at 04:00PM

Prior month one year inflation expectations 3.0%

one year and three year inflation expectations remain unchanged at 3.0%

five year inflation expectations 3% up from 2.7% prior month

January saw larger expected rise for food, gas, rent, college, medical prices.

January expected spending levels decline to lowest level since January 2021.

Labor market expectations were mixed

Perceptions of access to credit improved in January.

Household lower perception of financial situation in January

Inflation Expectations:

Unchanged at 3.0% for the 1-year and 3-year horizons.

Increased to 3.0% (+0.3 ppt) for the 5-year horizon.

Commodity Price Expectations (Year-Ahead):

Gas: +2.6% (+0.6 ppt).

Food: +4.6% (+0.6 ppt).

Medical care: +6.8% (+1.0 ppt).

College costs: +5.9% (+0.2 ppt).

Rent: +6.0% (+0.5 ppt).

Job Market Expectations:

Probability of losing one’s job: Increased to 14.2% (+2.3 ppt).

Probability of finding a job within 3 months: Increased to 51.5% (+1.3 ppt).

Household Spending Expectations:

Declined to 4.4% (-0.4 ppt), the lowest since January 2021.

More Details on Prices:

Median home price growth expectations rose by 0.1 percentage point to 3.2%. This increase was driven by respondents in the West census region. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.

Year-ahead commodity price expectations rose across the board, increasing by 0.6 percentage point for the price of gas to 2.6%, 0.6 percentage point for the price of food to 4.6%, 1.0 percentage point for the cost of medical care to 6.8%, 0.2 percentage point for the cost of college to 5.9%, and 0.5 percentage point for rent to 6.0%.

More details on Employment

Median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 3.0% in January. This series has been moving within a narrow range between 2.7% and 3.0% since January 2024.

Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.6 percentage point to 34.0%, the measure’s lowest reading since July 2021. The decline was driven by respondents with no college degree, those with an annual income below $100,000, and those above age 40.

More details on Household

The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.9 percentage point to 13.3%. This series remains above its 12-month trailing average of 13.0%.

The median expected year-ahead change in taxes at current income level increased by 0.2 percentage point to 3.2%, but remains well below its 12-month trailing average of 3.9%.

Median year-ahead expected growth in government debt increased by 0.1 percentage point to 6.0%. This reading is well below the series 12-month trailing average of 8.6%.

The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.2 percentage point to 25.0%.

Perceptions about households’ current financial situations compared to a year ago deteriorated in January, with the net share of households reporting a worse versus better situation compared to a year ago rising. Similarly, year-ahead expectations about households’ financial situations also deteriorated in January.

The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.5 percentage point to 40.3%.

This article was written by Greg Michalowski at www.forexlive.com.