NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the March 2024 Survey of Consumer Expectations, which shows inflation expectations remained unchanged at the short-term horizon, increased at the medium-term horizon, and decreased at the longer-term horizon. Labor market expectations were also mixed. While expectations about earnings growth and an increase in the unemployment rate were unchanged, respondents were more pessimistic about losing their job and finding a new job. Finally, although household finance perceptions and expectations were largely unchanged, the perceived probability of missing a minimum debt payment rose to its highest level since the onset of the COVID-19 pandemic.
The main findings from the March 2024 survey are:
Inflation
- For the third consecutive month, median one-year ahead inflation expectations remained unchanged at 3.0% in March. In contrast, the median three-year ahead inflation expectations increased to 2.9% from 2.7%, whereas the median five-year ahead decreased to 2.6% from 2.9%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) rose at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
- Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the one-year ahead horizon, rose slightly at the three-year ahead horizon, and declined marginally at the five-year ahead horizon.
- Median home price growth expectations were unchanged for the sixth consecutive month at 3.0%. The series has remained within a narrow range of 2.8% to 3.1% since June 2023.
- Median year-ahead expected price changes increased for all goods in the survey, by 0.2 percentage point for gas and food to 4.5% and 5.1%, respectively; 1.3 percentage points for the cost of medical care to 8.1%; 2.6 percentage points for rent to 8.7%; and 0.7 percentage point for the cost of a college education to 6.5%.
Labor Market
- Median one-year ahead expected earnings growth was unchanged at 2.8% for the second consecutive month, matching the series 12-month trailing average.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—remained essentially unchanged at 36.2%, below the series 12-month trailing average of 38.6%.
- The mean perceived probability of losing one’s job in the next 12 months increased by 1.2 percentage point to 15.7%. This is above pre-pandemic levels and the highest reading since September 2020. The mean probability of leaving one’s job voluntarily in the next 12 months also increased (by 1.1 percentage points) to 20.6%, above the series 12-month trailing average of 18.9%.
- The mean perceived probability of finding a job (if one’s current job was lost) decreased for the third consecutive month to 51.2% in March from 52.5% in February, the lowest reading in almost three years, and well below its February 2020 pre-pandemic level of 58.7%.
Household Finance
- Median expected growth in household income was unchanged at 3.1% in March. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023 and remains above the February 2020 pre-pandemic level of 2.7%.
- Median household spending growth expectations declined by 0.2 percentage point to 5.0%. The series has remained stable between 5.0% and 5.3% since August 2023, but remains well above its February 2020 pre-pandemic level of 3.1%.
- Perceptions of credit access compared to a year ago improved slightly with a larger share of respondents reporting that it was easier to obtain credit than 12 months ago, and a slightly smaller share of respondents reporting that it was harder to obtain credit. In contrast, consumers were slightly more pessimistic about future credit access with a larger share of respondents expecting tighter credit conditions a year from now, and a smaller share of respondents expecting looser credit conditions.
- The average perceived probability of missing a minimum debt payment over the next three months rose by 1.5 percentage points to 12.9%. This is the highest reading in four years since the onset of the COVID-19 pandemic. The increase is most pronounced among respondents between the ages of 40 and 60, and those with income below $50,000.
- The median expected year-ahead change in taxes (at current income level) increased by 0.3 percentage point to 4.2%, marginally above the series 12-month trailing average of 4.1%.
- Median year-ahead expected growth in government debt increased to 9.6% from 9.3% in February.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 1.9 percentage points to 24.2%, a new series low since the inception of the survey in June 2013.
- Perceptions about households’ current financial situations improved slightly with more respondents reporting being better off than a year ago, and fewer respondents reporting being worse off. Year-ahead expectations were mostly unchanged.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now rose by 0.3 percentage points to 39.2%.
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, 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.
