Press Release

Consumer Expectations Remain Mostly Unchanged in February

March 09, 2020

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data released the February 2020 Survey of Consumer Expectations, which shows a small increase in medium-term inflation expectations. Expectations about household income growth moderated somewhat, while spending growth and home price change expectations both ticked up.

The main findings from the February 2020 Survey are:


  • Median inflation expectations at the one-year horizon were unchanged at 2.5%, and increased at the three-year horizon to 2.6% in February from 2.5% in January.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased slightly at both horizons.
  • Median home price change expectations increased slightly from 3.0% in January to 3.1% in February, its highest value since November 2018.
  • The median one-year ahead expected change in the price of gasoline declined again in February from 3.4% to 3.1%, its lowest reading since July 2017. Expected changes in food prices, rent and in the cost of a college education and medical care all were largely stable, remaining within 0.1% of their January readings.

Labor Market

  • Median one-year ahead expected earnings growth was unchanged at 2.6% in February, remaining above the 12-month trailing average of 2.4%. Median earnings growth uncertainty increased slightly.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased slightly to 34.2% in February, from 34.8% in January and 34.6% in December and November.
  • The mean perceived probability of losing one’s job in the next 12 months declined 0.9 percentage point to 13.8% in February. The decline was broad-based across age and income groups. The mean probability of leaving one’s job voluntarily in the next 12 months increased from 21.2% in January to 22.2% in February. The increase was driven by respondents with household incomes over $50,000.
  • The mean perceived probability of finding a job (if one’s current job was lost) decreased from 59.8% in January to 58.7% in February, reading below its 12-month trailing average of 59.9%.

Household Finance

  • Median expected household income growth declined to 2.7% in February after three consecutive monthly readings of 2.9%.  The decline was driven by respondents under age 40.
  • Median household spending growth expectations increased 0.1 percentage point to 3.1% in February, its third consecutive increase and approaching its trailing 12-month average of 3.2%.
  • Perceptions of credit access compared to a year ago deteriorated with a smaller proportion of respondents reporting easier credit access and a greater proportion of respondents reporting harder credit access. On the contrary, expectations for year-ahead credit availability improved slightly, with fewer respondents expecting credit will become harder to obtain.
  • The average perceived probability of missing a minimum debt payment over the next three months declined from 11.8% to 11.4% in February, falling below its 12-month average of 11.5%.
  • The median expectation regarding a year-ahead change in taxes (at current income level) increased from 2.6% in January to 2.7% in February, its highest reading since June 2019.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased to 28.5% in February, from 26.5% in January.
  • Perceptions about households’ current financial situations compared to a year ago improved, while one-year ahead expectations about households’ financial situations were stable.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased for the fourth consecutive month to 42.5% in February from 41.4% in January.

About the Survey of Consumer Expectations (SCE)

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers’ outlooks. Expectations are also available by age, geography, income, education, and numeracy. 

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel allows us to observe the changes in expectations and behavior of the same individuals over time.

Shelley Pitterson
(917) 698-0510
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