The Federal Reserve Bank of New York’s Center for Microeconomic Data has released the results of its February 2024 Survey of Consumer Expectations. The findings indicate that inflation expectations for medium- and long-term horizons have risen, while consumer confidence in the job market and obtaining credit has declined.
According to a press release by the New York Fed, approximately 1,300 household heads participated in the survey. While median inflation expectations remained steady at 3.0% for the one-year horizon, they increased to 2.7% from 2.4% for the three-year ahead horizon and to 2.9% from 2.5% for the five-year ahead horizon. The most significant increase in longer-term horizon results was observed among respondents with no more than a high school diploma.
The New York Fed press release also highlighted that median home price growth expectations remained at 3.0%, consistent with figures from the previous five months. Although median year-ahead expected price changes rose by a marginal 0.1 percentage point to 4.3% for gas, expectations decreased by 1.8 percentage points to 6.8% for medical care, by a 0.1 percentage point to 5.8% for college education, and by a 0.3 percentage point for rent to 6.1%. Food price change expectations remained unchanged at 4.9%.
According to the same press release, while median one-year-ahead expected earnings held steady at 2.8%, there was an increase in perceived job loss probability over the next year - up by 2.7 percentage points to reach a total of14.5%. Additionally, the likelihood of voluntarily leaving one's job within the next year also rose by 1.8 percentage points to hit19.5%. These increases were most noticeable among households earning less than $50,000 annually. Moreover, the perceived probability of finding a new job if one lost their current position decreased to 52.5% from 54.2% in January.
The New York Fed also noted that median household spending growth expectations increased by a 0.2 percentage point to 5.2%, primarily driven by respondents with no more than a high school diploma. Tight credit conditions have led to deteriorating perceptions towards credit access compared to the previous year, and consumers expect these conditions to tighten further in the coming year.