Inflation expectations fell and consumers expect to spend less, according to the Survey of Consumer Expectations, released by the Federal Reserve Bank of New York on Monday.

“[H]ousehold inflation expectations declined at the one-year ahead horizon and dropped noticeably at the three-year ahead horizon,” the survey noted.

The Federal Reserve Bank of New York.
The Federal Reserve Bank of New York. Bloomberg News

“The outlook of consumers in several other dimensions showed few signs of optimism — spending growth expectations remained at their series low and perceived current and expected future financial situations worsened from the previous month,” the survey said.

Median inflation expectations slid to 2.6% from 2.8% for a one-year period and fell to 2.5% from 2.9% for a three-year horizon.

Turning to labor, the expected earnings for one-year declined to 2.2% from 2.5%. The mean perceived probability of losing one’s job in the next 12 months grew to 13.6% from 13.2%, while the chances of voluntarily leaving a job slipped to 19.4% from 19.9%. The probability of finding a job, if one lost his/her current job) crept to 56.7% from 56.5%.

Median one-year ahead home prices are expected to grow 3.5%, up from 3.4% last month, the Fed said.

Median household spending expectations held at 2.6%, the lowest since the survey began in June 2013. Income growth expectations decreased to 2.7% from 2.8% the prior month.

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