NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the November 2024 Survey of Consumer Expectations, which shows that households’ inflation expectations increased slightly at the short-, medium-, and longer-term horizons. Households expressed more optimism about their year-ahead financial situations, while earnings and household income growth expectations both rose in November. Other labor market expectations deteriorated and spending growth expectations continue to moderate.
The main findings from the November 2024 Survey are:
Inflation
- Median inflation expectations increased by 0.1 percentage point at all three horizons in November. One-year-ahead inflation expectations increased to 3.0%, three-year-ahead inflation expectations increased to 2.6%, and five-year-ahead inflation expectations increased to 2.9%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) increased at all three horizons. The overall increase in one- and three-year ahead inflation expectations masks a decline among those without a college degree and an increase among those with a college degree.
- Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at all three horizons.
- Median home price growth expectations were unchanged at 3.0% in November. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
- Year-ahead commodity price expectations declined by 0.5 percentage point for gas to 2.7%, 0.5 percentage point for food to 3.8%, and 0.2 percentage point for rent to 5.7%. The expected change in the cost of medical care increased by 0.2 percentage point to 6.0% and the expected change in the cost of a college education increased by 1.0 percentage point to 6.7%.
Labor Market
- Median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 3.0% in November. The series has been moving within a narrow range between 2.7% and 3.0% since January 2024. The increase was driven by those without a college degree.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—ticked up by 0.5 percentage point to 35.0% in November, remaining well below its trailing 12-month average of 37.0%.
- The mean perceived probability of losing one’s job in the next 12 months increased by 0.5 percentage point to 13.5%. The mean probability of leaving one’s job voluntarily in the next 12 months decreased by 0.3 percentage point to 20.2%.
- The mean perceived probability of finding a job (if one’s current job was lost) decreased by 1.9 percentage points to 54.1%. The decrease was broad-based across age and education groups.
Household Finance
- The median expected growth in household income increased by 0.1 percentage point to 3.1% in November. The series has been moving in a narrow band between 2.9% and 3.3% since January 2023. The increase was driven by those without any college education.
- Median household spending growth expectations declined by 0.2 percentage point to 4.7%, the lowest reading since April 2021, but above pre-pandemic levels.
- Perceptions of credit access compared to a year ago showed a larger share of households reporting no change and a smaller share reporting it is harder or easier. Expectations for future credit availability improved somewhat in November, with a smaller share of 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 0.7 percentage point to 13.2%, the lowest reading since June 2024. The decrease was driven by those with a high school education or less.
- The median expectation regarding a year-ahead change in taxes (at current income level) declined by 0.6 percentage point to 3.4%.
- Median year-ahead expected growth in government debt decreased sharply by 2.3 percentage points to 6.2%, the lowest reading since February 2020.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 2.1 percentage points to 26.7%.
- Perceptions about households’ current financial situations compared to a year ago were mostly unchanged but year-ahead expectations about households’ financial situations improved considerably in November. The share of households expecting a better financial situation in one year from now rising rose to its highest levels since February 2020, while the share expecting a worse financial situation fell to its lowest level since May 2021.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.3 percentage points to 40.4%.
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.
