NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the December 2024 Survey of Consumer Expectations, which shows that inflation expectations were unchanged at the short-term horizon, increased at the medium-term horizon, and decreased at the longer-term horizon. The average perceived likelihoods of a job loss, voluntary job separation, and finding a job in the event of a job loss all declined. While year-ahead household income growth expectations declined slightly and are now comparable to their pre-pandemic levels, spending growth expectations increased and remain well above pre-pandemic readings.
The main findings from the December 2024 Survey are:
Inflation
- Median inflation expectations were unchanged at 3.0% at the one-year horizon, increased to 3.0% from 2.6% at the three-year horizon, and declined to 2.7% from 2.9% at the five-year horizon. The increase at the three-year horizon was broad-based across age, education, and income groups. However, the decline at the five-year horizon was driven by respondents below age 40 and was most pronounced for those with a high-school education or less. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) was unchanged at the one-year horizon, increased at the three-year horizon, and decreased 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 increased by 0.1 percentage point to 3.1%. The series has held in a range from 3.0 to 3.3% since August 2023.
- Year-ahead commodity price expectations for food increased by 0.2 percentage point to 4.0%, while price expectations for other commodities declined. Year-ahead price expectations fell by 0.7 percentage point for gas to 2.0% (the lowest reading since September 2022), by 1 percentage point for the cost of college education to 5.7%, by 0.2 percentage point for the cost of medical care to 5.8%, and by 0.2 percentage point for rent to 5.5%.
Labor Market
- Median one-year-ahead expected earnings growth decreased by 0.2 percentage point to 2.8%. The current reading equals the 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—declined by 0.4 percentage point to 34.6%.
- The mean perceived probability of losing one’s job in the next 12 months declined by 1.6 percentage points to 11.9%. The mean probability of leaving one’s job voluntarily in the next 12 months also declined by 2.0 percentage points to 18.2%. Both readings are the lowest since January 2024. The declines were most pronounced for the respondents with some college education and those with annual household incomes below $50,000.
- The mean perceived probability of finding a job if one’s current job was lost declined sharply, to 50.2% from 54.1% in November 2024. This is the lowest reading since April 2021. The decline was most pronounced for respondents with a high school degree or less.
Household Finance
- Median expected growth in household income declined by 0.3 percentage point to 2.8%, the lowest reading since May 2021. The series remains slightly above the pre-pandemic level of 2.7% from February 2020.
- Median household spending growth expectations increased by 0.1 percentage point to 4.8%, remaining well above pre-pandemic levels.
- Perceptions of credit access compared to a year ago deteriorated, with a larger share of respondents reporting tighter conditions. Expectations about credit access a year from now also deteriorated, with a smaller share of respondents expecting looser credit and a larger share expecting tighter credit a year from now.
- The average perceived probability of missing a minimum debt payment over the next three months increased to 14.2% from 13.2%. The increase was broad-based across income and education groups. This reading equals the September 2024 reading, which was the highest level of the series since April 2020.
- The median expected year-ahead change in taxes at current income level decreased by 0.4 percentage point to 3.0%, its lowest reading since October 2020.
- Median year-ahead expected growth in government debt declined by 0.3 percentage point to 5.9%, reaching the lowest level since January 2018.
- The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now decreased by 1.5 percentage points to 25.2%.
- Perceptions about households’ current financial situations improved, with fewer respondents reporting being worse off and more respondents reporting being better off than a year ago. Year-ahead expectations were essentially unchanged, with a smaller share of respondents expecting to be worse off and a smaller share expecting to be better off a year from now.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now declined by 0.6 percentage point to 39.8%.
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.
