Press Release

Inflation Expectations Increase at Short Term, But Decline at Medium and Longer Terms; Home Price Growth Expectations Decline Sharply

July 11, 2022

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data today released the June 2022 Survey of Consumer Expectations, which shows an increase in short-term inflation expectations, but a decline in medium-term and longer-term inflation expectations. Home price growth expectations declined sharply, along with year-ahead spending growth expectations. Credit access perceptions and expectations continued to deteriorate. Similarly, households' perceptions and expectations for current and future financial situations both deteriorated.

The main findings from the June 2022 Survey are:


  • Median one-year-ahead inflation expectations increased to 6.8%, from 6.6% in May, marking a new series high. In contrast, median three-year ahead inflation expectations decreased to 3.6% from 3.9%. The increase in short-term expectations was driven by respondents over age 60 and respondents with at least some college education. The decline in medium-term expectations was broad-based across education and income groups. Our measures of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased at the one-year-ahead horizon and remained unchanged at the three-year-ahead horizon.
  • Median five-year ahead inflation expectations, which have been elicited in the monthly SCE core survey on an ad-hoc basis since the beginning of this year, declined to 2.8% from 2.9%. After being stable at 3.0% during the first three months of the year, the series has trended down slightly. Disagreement across respondents in their five-year ahead inflation expectations has been trending up during this period and increased again in June.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at the one-year ahead horizon to a new series high, but remained unchanged at the three-year ahead horizon. Uncertainty at the five-year ahead horizon increased.
  • The median expected change in home prices one year from now dropped sharply to 4.4% from 5.8%. This is the lowest reading of the series since February 2021. The decline, the second largest recorded in the survey's series only to the sharp drop at the onset of the pandemic, was broad based across age, education, and income groups. The decline was largest in the West census region.
  • Expectations about year-ahead price changes increased by 0.1 percentage point for gas (to 5.6%), rent (to 10.3%), medical care (to 9.5%), and college education (to 8.7%). The median one-year-ahead expected change in the price of food decreased by 0.1 percentage point to 9.2%.*

Labor Market

  • Median one-year-ahead expected earnings growth remained unchanged at 3.0% in June for the sixth consecutive month.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased by 1.8 percentage points to 40.4%, its highest level since April 2020. The increase was driven by respondents with annual household incomes over $50k.
  • The mean perceived probability of losing one's job in the next 12 months rose to 11.9% from 11.1%, but remains 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 declined to 18.6%, from 20.3% in May, remaining well below the pre-pandemic reading of 22.2% in February 2020.
  • The mean perceived probability of finding a job in the next three months (if one's current job was lost) declined to 56.8% from 58.2%, but remains slightly above its 12-month trailing average of 56.2%.

Household Finance

  • The median expected growth in household income increased by 0.2 percentage point in June to 3.2%. The increase was broad based across education groups.  
  • Median year-ahead household spending growth expectations retreated from its series high in May, declining by 0.6 percentage point to 8.4% but remaining well above its 2021 average of 5.0%. The decline was the first this year and driven by respondents over age 40, those without any college education, and those with annual household incomes under $50k.
  • Perceptions of credit access compared to a year ago continued to deteriorate in June, with the share of respondents finding it harder to obtain credit now than a year ago reaching a series high. Expectations about future credit availability deteriorated as well, with more respondents expecting that 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 increased by 0.2 percentage point to 11.3%. This is the highest reading of the series since May 2020, and comparable to its pre-pandemic level of 11.4% in February 2020.
  • The median expectation regarding a year-ahead change in taxes (at current income level) decreased by 0.1 percentage point to 4.5%. 
  • Median year-ahead expected growth in government debt decreased by 0.8 percentage point to 11.1%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased to 35.7% from 35.0% , its highest level since January 2019.
  • Perceptions about households' current financial situations compared to a year ago deteriorated in June, with more respondents reporting being financially worse off than they were a year ago. Respondents were also more pessimistic about their household's financial situation in the year ahead, with fewer (more) respondents expecting their financial situation to improve (deteriorate) a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased to 33.8% from 36.2%.

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, the survey 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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