Consumers’ inflation expectations worsen, but optimistic on jobs


Consumers’ expectations for inflation worsened in May, but they remained upbeat on jobs, according to a report out today by the Federal Reserve Bank of New York’s Center for Microeconomic Data.

Median inflation expectations for one year ahead rose in May to 6.6% from 6.3% in April. May’s reading was the highest reading since the survey began in June 2013.

Turning to the labor market, median one-year-ahead earnings growth expectations remained unchanged for the fifth consecutive month at a series high of 3.0%.

Mean unemployment expectations — or the mean probability the US unemployment rate will be higher one year from now — increased for the third consecutive month to 38.6% in May from 36.3% in April. This is the highest reading since February 2021.

The mean perceived probability of losing one’s job in the next 12 months increased by 0.3 percentage point to 11.1% in May but remained below the series’ 2021 average of 12.5%. The mean probability of leaving one’s job voluntarily in the next 12 months increased sharply to 20.3% in May from 19.0% in April. This is the highest reading since September 2020.

The mean perceived probability of finding a job (if one’s current job was lost) increased to 58.2% in May from 57.4% in April, its highest value since February 2020. The increase was driven by respondents over age 40, those without a college education and those with household incomes below $50,000.