The Federal Reserve Bank of New York’s Center for Microeconomic Data released its January 2025 Survey of Consumer Expectations, highlighting stable inflation expectations at short- and medium-term horizons, with an increase at the longer-term horizon. The survey noted a rise in commodity price expectations, including gas, food, medical care, education, and rent. Labor market expectations were mixed; both job loss and job finding expectations rose while unemployment expectations fell to their lowest since July 2021. Household spending growth expectations declined to their lowest in four years.
Key findings from the survey included unchanged median inflation expectations at 3.0% for one- and three-year horizons. However, five-year-ahead inflation expectations increased by 0.3 percentage points to 3.0%, driven mainly by respondents with a high-school education or less. Disagreement among respondents regarding inflation increased at the one- and five-year horizons but remained unchanged at the three-year horizon.
Home price growth expectations saw a slight rise of 0.1 percentage point to 3.2%, influenced by respondents from the West census region. Commodity price forecasts indicated increases across various categories: gas prices up by 0.6 percentage points to 2.6%, food prices up by 0.6 percentage points to 4.6%, medical care costs up by 1.0 percentage point to 6.8%, college costs up by 0.2 percentage point to 5.9%, and rent up by 0.5 percentage point to 6%.
Labor market insights showed a slight increase in one-year-ahead earnings growth expectations by 0.2 percentage point to 3%. Unemployment expectations decreased by 0.6 percentage points to reach their lowest since July 2021, driven mainly by respondents without college degrees, those earning below $100,000 annually, and individuals over age forty.
The perceived probability of job loss within twelve months increased by 2.3 percentage points to 14.2%, with a notable impact on those over sixty years old; voluntary job departure probability also rose by 1.7 percentage points to nearly twenty percent.
In household finance trends, expected household income growth increased slightly while spending growth projections dropped notably to levels last seen in early January of four years prior.
Credit access perceptions improved compared to a year ago as did future credit availability outlooks; however, perceptions about current financial situations deteriorated compared with the previous year.
Mariah Measey is available for contact regarding further information on these findings via email at Mariah.Measey@ny.frb.org or phone (347)978-3071.
