Consumers’ inflation expectations gained, according to the October Survey of Consumer Expectations, released by the Federal Reserve Bank of New York on Tuesday.

“Expectations about income and spending growth decreased, but expectations about household financial situations and credit availability improved,” the survey noted. “Labor market expectations continued to improve, with expectations about earnings growth and unemployment reaching levels not seen since late 2014.”

Federal Reserve Bank of New York
Federal Reserve Bank of New York Dmadeo, via Wikicommons

Median inflation expectations grew to 2.8% in December from 2.6% in November for a one-year period and increased to 2.9% from 2.8% for a three-year horizon.

Turning to labor, the expected earnings growth for one-year climbed to 2.7% from 2.6%. The mean perceived probability of losing one’s job in the next 12 months rose to 13.8% from 13.5%, while the mean probability of leaving one’s job voluntarily in the next 12 months gained to 21.7% from 21.5%.

The probability of finding a job, if one lost his/her current job, held at 60.0%.

Median one-year ahead home prices are expected to grow 3.2%, off from 3.3% last month, the Fed said.

Median household spending expectations fell to 2.9% from 3.6%. Income growth expectations dropped to 2.8% from 3.0%.

A little more than one-third of respondents (34.5%) believe average savings account interest rates will be higher, while 44.3% believe stock prices will gain over the next year.

“Median year-ahead expected growth in government debt dropped to 7.2%, from 7.8% in November (the highest level in 2017), but remains high compared to the past 12 months,” the release said.

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