Federal Reserve Survey in New York: Slight decrease in inflation expectations and improvement in labor market outlook.

Federal Reserve Survey in New York: Slight decrease in inflation expectations and improvement in labor market outlook.
الفيدرالي الأمريكي

A consumer expectations survey conducted by the Federal Reserve Bank of New York in October showed a slight decrease in inflation expectations among households for the short, medium, and long term. The survey also indicated an improvement in labor market expectations, as the likelihood of unemployment and job loss decreased among American households, while their expectations regarding the chances of finding a job in the event of a layoff increased.

Additionally, consumer expectations regarding access to credit improved, as did expectations about the availability of credit in the future, while the likelihood of defaulting on minimum debt payments over the next three months decreased.

According to the press release published on the Federal Reserve Bank of New York's website, the main findings from the survey were as follows:

Inflation

  • Medium-term inflation expectations declined slightly across all time horizons:
    • Next year; decreased by 0.1% to 2.9%.
    • Next three years: decreased by 0.2% to 2.5%.
    • Next five years: decreased by 0.1 percentage point to 2.8%.
  • The level of uncertainty about inflation movements remained unchanged for one year, but it decreased for three- and five-year periods.
  • Expectations for inflation in prices of various goods, including gas, food, and rent, decreased slightly for next year.
  • The expected cost of medical care decreased by 0.8% to 5.8%, the lowest level since January 2020.

Labor Market

  • Average wage growth expectations for next year remained unchanged at 2.8%.
  • Expectations for unemployment next year decreased by 1.7% to 34.5%, the lowest level since February 2022.
  • Expectations for job loss likelihood next year decreased slightly to 13.0%.
  • The likelihood of finding a new job in the event of a layoff increased by 3.3% to 56%, the highest level since October 2023.

Household Finances

  • Expected average household income growth remained unchanged at 3.0%.
  • Spending growth expectations remained at 4.9%, still higher than pre-pandemic levels.
  • Expectations for access to credit improved compared to the previous year. Future credit availability expectations also increased.
  • The probability of defaulting on minimum debt payments over the next three months decreased by 0.3% to 13.9%.
  • Expectations regarding the level of taxes and government debt slightly increased for next year.

It is worth noting that the consumer expectations survey is a monthly online survey of about 1,300 households, providing a clearer view of consumer expectations regarding inflation, prices, labor market conditions, household finances, and access to credit. The survey tracks changes in these expectations over time, providing valuable data for economic analysis.


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