Consumers’ inflation expectations held for one-year, but dipped for the three-year horizon, according to the July Survey of Consumer Expectations, released by the Federal Reserve Bank of New York on Monday.
“Consumers’ outlook for the labor market was largely positive, with unemployment and earnings expectations improving. Household income growth expectations rose to a new series high,” the survey noted.
Median inflation expectations held at 2.5% in July for a one-year period and slid to 2.7% from 2.8% for a three-year horizon.
Turning to labor, the expected earnings for one-year gained to 2.6% from 2.5%. This was the highest reading in the category since March 2015. The mean perceived probability of losing one’s job in the next 12 months climbed to 13.7% from 13.5%, while the chances of voluntarily leaving a job grew to 21.7% from 20.8% last month. The probability of finding a job, if one lost his/her current job, decreased to 57.1% from 59.2%.
Median one-year ahead home prices are expected to grow 3.2%, down from 3.5% last month, the Fed said.
Median household spending expectations fell to 2.8% from 3.3%, below its average 3.2% reading for the past year. Income growth expectations rose to 3.0%, the highest reading since the survey began in June 2013, from 2.7%.