The Federal Reserve Bank of New York’s Center for Microeconomic Data has released the February 2025 Survey of Consumer Expectations. The survey indicates a slight increase in short-term inflation expectations, while medium- and longer-term expectations remain stable. Households have become more pessimistic about their financial prospects for the year ahead, with notable declines in unemployment, delinquency, and credit access expectations. In contrast, spending growth expectations have risen significantly.
Key findings from the survey reveal that median inflation expectations increased by 0.1 percentage point at the one-year horizon to 3.1%, while remaining unchanged at 3.0% for both three-year and five-year horizons. Median home price growth expectations also rose by 0.1 percentage point to 3.3%. Commodity price expectations for gas, food, medical care, college degrees, and rent saw increases across the board.
Labor market indicators show that median one-year-ahead earnings growth expectations remained at 3.0%. Unemployment rate expectations jumped by 5.4 percentage points to 39.4%, marking a high since September 2023. The probability of job loss decreased slightly to 14.1%, while expected quit rates fell to their lowest level since July 2023 at 17.6%.
In terms of household finance, median expected income growth increased marginally to 3.1%. Nominal household spending growth expectations climbed by 0.6 percentage point to reach a trailing average of just over its previous twelve months at 5%. Credit access perceptions deteriorated significantly; more households found it harder to obtain credit compared to a year ago.
Debt-related concerns are rising as well, with an increase in the perceived probability of missing minimum debt payments over the next three months reaching its highest level since April 2020 at 14.6%. Tax expectation changes increased modestly by a small margin.
The survey is conducted through an internet-based panel representative of approximately 1,300 U.S households on a rotating basis allowing insights into consumer outlooks on inflation, prices across various sectors including housing and education along with job prospects and credit accessibility among other metrics.
For further details regarding this survey or methodology inquiries please contact Mariah Measey at (347)978-3071 or via email: Mariah.Measey@ny.frb.org
