MNI: Price Views Stable, Households Less Optimistic - NY Fed
U.S. inflation expectations were largely stable in August as households grew less optimistic about their financial situations, with job loss expectations rising sharply to its highest level since April 2021, according to the latest New York Fed survey.
Median one- and five-year-ahead inflation expectations rose a tenth in August, to 3.6% and 3.0%, respectively. Three-year-ahead inflation expectations declined a tenth to 2.8%. Median home price growth expectations increased by 0.3pp to 3.1%, its highest reading since July 2022. Year-ahead commodity price expectations rose across the board in August.
The mean perceived probability of losing one’s job in the next 12 months rose by 2.0pp to 13.8%, its highest reading since April 2021. The median expected growth in household income fell by 0.3pp to 2.9% in August, its lowest reading since July 2021, according to the August Survey of Consumer Expectations.
Perceptions about current and future credit conditions both deteriorated, the survey showed. The share of households reporting it is harder to obtain credit than one year ago hit a new series high.