The Federal Reserve Bank of New York’s Center for Microeconomic Data has released the July 2024 Survey of Consumer Expectations, revealing stable short- and long-term inflation expectations but a significant decline in medium-term expectations to a new series low. Labor market expectations were mixed, with respondents anticipating lower earnings growth and reduced likelihood of finding a new job within three months if laid off. Delinquency expectations continued their upward trend, reaching the highest level since April 2020.
Key findings from the survey include:
**Inflation**
Median one- and five-year-ahead inflation expectations remained unchanged at 3.0% and 2.8%, respectively. However, median three-year-ahead inflation expectations dropped sharply by 0.6 percentage points to 2.3%, marking a series low since June 2013. This decline was most notable among respondents with a high school education or less and those with annual household incomes under $50,000.
Median home price growth expectations held steady at 3.0%. Year-ahead commodity price expectations showed mixed results: gas prices declined by 0.8 percentage points to 3.5%, food prices decreased by 0.1 percentage points to 4.7%, while medical care costs rose by 0.2 percentage points to 7.6%, college education costs increased by 1.9 percentage points to 7.2%, and rent went up by 0.6 percentage points to 7.1%.
**Labor Market**
Median one-year-ahead expected earnings growth fell by 0.3 percentage points to 2.7%. Mean unemployment expectations decreased by one percentage point to 36.6%, staying below its trailing average of the past year.
The mean perceived probability of losing one's job in the next year decreased slightly by half a percentage point to 14.3%. Conversely, the mean probability of voluntarily leaving one's job increased marginally by two-tenths of a percentage point to reach its highest level since February last year at 20.7%. The mean perceived probability of finding a new job if laid off declined by nearly one percentage point to stand at just over half (52%).
**Household Finance**
The median expected growth in household income remained constant at three percent, while median household spending growth projections fell slightly to just under five percent—its lowest reading since April three years ago.
Credit access perceptions worsened compared to last year, although future credit availability outlooks improved somewhat for July this year.
Expectations regarding tax changes over the coming year dipped slightly as well as projections for government debt remaining unchanged from previous levels around nine percent annually.
Finally, there was an uptick in optimism about stock prices rising over the next twelve months along with slight improvements reported on current financial situations compared against last year's status quo; however more households anticipate worse conditions ahead financially speaking looking forward into next fiscal period
