Fed survey: Inflation expectations hold in Jan.; less optimism about economy

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Consumers’ inflation expectations held, while respondents showed more pessimism about the economy, according to the January Survey of Consumer Expectations, released by the Federal Reserve Bank of New York on Monday.

“Regarding their own financial situation, respondents were less optimistic about future credit availability, and fewer expect to be financially better off a year from now,” the survey noted.

Median inflation expectations remained 3.0% for the one-year period and a three-year horizon. “Inflation expectations at both horizons have been very stable over the past nine months,” according to the survey.

The expected earnings growth for one-year dipped to 2.4% from 2.5%. The mean perceived probability of losing one’s job in the next 12 months grew to 14.5% from 13.8%, while the mean probability of leaving one’s job voluntarily in the next 12 months rose to 21.4% from 21.1%.

The probability of finding a job, if one lost his/her current job, climbed to 59.2% from 58.8%.

Median one-year ahead home prices are expected to grow 3.0%, unchanged from last month, following six months of drops.

Median household income growth expectations slipped to 2.8% from 2.9%, while spending growth expectations fell to 3.0% from 3.5%. “Spending growth expectations can be volatile and exhibit seasonality, but they stabilized in 2017 and 2018 after declining from annual averages of 4.7%, 3.7%, and 3.5% in 2014, 2015, and 2016, respectively,” the Fed said.

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Economic indicators Federal Reserve Bank of New York
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