NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the May 2024 Survey of Consumer Expectations, which shows inflation expectations declined at the short-term horizon, remained unchanged at the medium-term horizon, and increased at the longer-term horizon. Labor market expectations were mixed. Households’ expectations for the stock market improved, reaching a three-year high. Households were also more optimistic about their financial situation a year from now.
The main findings from the May 2024 Survey are:
Inflation
- Median inflation expectations at the one-year horizon declined to 3.2% in May from 3.3% in April, were unchanged at the three-year horizon at 2.8%, and increased at the five-year horizon to 3.0% from 2.8%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one-year horizon, increased at the three-year horizon, and remained unchanged at the five-year horizon.
- Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at the one- and three-year horizons and declined at the five-year horizon.
- Median home price growth expectations were unchanged at 3.3%.
- Median year-ahead expected price changes were unchanged for gas (at 4.8%), food (5.3%), and rent (9.1%). They increased by 0.4 percentage point for medical care, to 9.1%, and declined by 0.6 percentage point for the cost of a college education, to 8.4%.
Labor Market
- Median one-year-ahead expected earnings growth was unchanged at 2.7%, just below its 12-month trailing average of 2.8%.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased to 38.6% from 37.2%, and is now above the 12-month trailing average of 37.8%.
- The mean perceived probability of losing one’s job in the next 12 months decreased by 2.7 percentage points to 12.4%, falling below the 12-month trailing average of 13.2%. The mean probability of leaving one’s job voluntarily in the next 12 months increased slightly, to 19.6% from 19.4%, remaining slightly above the 12-month trailing average of 18.9%.
- The mean perceived probability of finding a job if one’s current job was lost increased by 1.3 percentage points to 52.2%, after reaching the lowest level since April 2021 last month.
Household Finance
- Median expected growth in household income increased by 0.1 percentage point to 3.1%, remaining within the narrow range of 2.9% to 3.2% the series has maintained for the past year.
- Median household spending growth expectations declined by 0.2 percentage point to 5.0%. The series has moved within a narrow range of 5.0% to 5.2% since November 2023, remaining well above its February 2020 level of 3.1%.
- Perceptions of credit access compared to a year ago were largely unchanged, while expectations about future credit access deteriorated, with a larger share of respondents expecting tighter credit conditions a year from now, and a smaller share expecting easier conditions.
- The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.9 percentage point to 12.0%, a level comparable to those prevailing just before the pandemic.
- The median expected year-ahead change in taxes at current income level declined by 0.4 percentage point to 3.9%.
- Median year-ahead expected growth in government debt decreased to 9.3% from 9.6%.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 1.5 percentage points to 27.0%, the highest reading since November 2023.
- Perceptions about households’ current financial situations improved, with more respondents reporting being better off than a year ago and fewer respondents reporting being worse off. Year-ahead expectations also improved, with a smaller share of respondents expecting to be worse off and a larger share of respondents expecting to be better off a year from now. The share of respondents expecting to be financially the same or better off 12 months from now is 78.1%, the highest level since June 2021.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.8 percentage points to 40.5%, the highest level since May 2021.
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, the interactive chart guide, and the survey questionnaire.
