MNI BRIEF: US Consumers' Price Expectations Hit Records-NY Fed

The New York Fed's median measures of one-year-ahead and three-year-ahead consumer inflation expectations each jumped 0.3 percentage points in August, both reaching a new high for the series. The year-ahead measure jumped to 5.2%, the tenth consecutive monthly increase, and the three-year-ahead measure hit 4.0%, the third straight move up.

Both increases were broad based across age and income groups, the New York Fed said in a statement in its release of the Survey of Consumer Expectations. Home price growth expectations fell 0.1ppt to 5.9% in August, the third consecutive monthly decline, and food and rent price expectations both moved up.

The survey showed household income growth expectations increasing 0.1ppt to 3.0%, a series high, driven by households at the bottom of the income spectrum. Household spending growth, however, ticked down slightly, but remained above pre-Covid levels. MNI previously reported consumer views are currently more sensitive to incoming news than at other times, heightening risks of upward moves in long run price expectations.