Press Release

Inflation Expectations Decline at the Short- and Medium-Term Horizons

February 14, 2022

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data today released the January 2022 Survey of Consumer Expectations, which shows a decrease in short- and medium-term inflation expectations. Median home price expectations, however, increased above its 2021 average. Labor, income, and spending expectations were all largely stable in January.

The Federal Reserve Bank of New York also issued an accompanying Liberty Street Economics blog post on how consumers' inflation expectations have responded to inflation during the pandemic.

The main findings from the January 2022 Survey are:


  • Median one-year-ahead inflation expectations decreased to 5.8% in January from 6.0% in December. This is the first decline in short-term inflation expectations since October 2020. Similarly, median three-year ahead inflation expectations decreased by 0.5 percentage point to 3.5%. The decline in medium-term inflation expectations was broad-based across age, education, and income groups and is the largest one month decline in the measure since the inception of the survey in 2013. Both measures of inflation expectations, however, remain elevated compared to their pre-COVID-19 readings. Our measures of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased at the short-term horizon, but decreased at the medium-term horizon.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—remained unchanged at the one-year horizon and decreased slightly at the three-year horizon. Both measures remain well above their pre-pandemic February 2020 readings.
  • Median year-ahead home price change expectations increased to 6.0% from 5.5%, above its 2021 average of 5.4%. The increase was most pronounced among respondents with no more than a high school education and those who live in the "West" and "Northeast" Census regions.
  • The commodity price change expectations elicited in the survey all declined in January. The expectations about year-ahead price changes for food, rent, gas, and medical care all declined by 0.1 percentage point to 7.7%, 9.8%, 5.6%, and 9.5%, respectively. The median one-year ahead expected change in the cost of a college education decreased by 0.7 percentage points to 7.3%.*

Labor Market

  • Median one-year-ahead expected earnings growth was unchanged at 3.0% in January and remains above its 2021 average of 2.6%.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased by 0.7 percentage point to 35.9%.
  • The mean perceived probability of losing one's job in the next 12 months remains unchanged at 11.6%, well below its pre-pandemic reading of 13.8% in February 2020. The mean probability of leaving one's job voluntarily in the next 12 months decreased to 19.3% in January, from 19.9%.
  • The mean perceived probability of finding a job (if one's current job was lost) declined to 55.6% in January from 57.5%, but remains well above its 12-month trailing average of 53.5%.

Household Finance

  • The median expected growth in household income fell by 0.1 percentage point to 3.3% in January, but remains above its trailing 12-month average of 2.9%.
  • Median year-ahead household spending growth expectations remained unchanged at 5.5%, substantially above its pre-pandemic level.
  • Perceptions of credit access compared to a year ago deteriorated slightly in January, with more respondents finding it harder to obtain credit now than a year ago. Expectations for future credit availability deteriorated slightly as well with more respondents expecting it will be harder to obtain credit in the year ahead.
  • The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.3 percentage point to 10.0%, which is slightly below the 12-month trailing average of 10.1%.
  • The median expectation regarding a year-ahead change in taxes (at current income level) was unchanged at 4.4%. 
  • Median year-ahead expected growth in government debt increased by 0.3 percentage point to 11.1%, which is the second lowest reading since December 2020.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased to 30.5% in January, from 28.2%. This is the highest reading of the series since May 2019.  
  • Perceptions about households' current financial situations compared to a year ago improved slightly, with fewer respondents reporting being financially worse off than they were a year ago. Respondents were slightly more pessimistic about their household's financial situation in the year ahead, with more respondents expecting their financial situation to deteriorate a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.4 percentage point to 38.5%.

About the Survey of Consumer Expectations (SCE)

The Survey of Consumer Expectations (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, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here, the interactive chart guide, and the survey questionnaire.

* Due to a data recording error in the “one-year ahead commodity price change expectations” series, the data for this series has been revised going back to October 2020.

Mariah Measey
(347) 978-3071 
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