The Federal Reserve Bank of New York's Center for Microeconomic Data has released the June 2025 Survey of Consumer Expectations. The survey reveals that households' short-term inflation expectations have decreased, while expectations for medium- and longer-term inflation remain unchanged. There is also an improvement in unemployment and job loss expectations. Meanwhile, spending growth expectations have slightly declined, but household income growth expectations have risen. Households show more optimism about their financial situations and credit access in the year ahead.

Key findings from the survey include a decrease in median inflation expectations by 0.2 percentage points to 3.0% at the one-year-ahead horizon, with no change at three-year (3.0%) and five-year (2.6%) horizons. The measure of disagreement among respondents decreased across all horizons, as did median inflation uncertainty at the one- and three-year-ahead horizons.

Home price growth expectations remained steady at 3.0%, while commodity price change expectations increased significantly for gas, medical care, college education, and rent. Food price change expectations stayed constant at 5.5%.

In terms of labor market perceptions, one-year-ahead earnings growth expectations fell by 0.2 percentage points to 2.5%. Unemployment rate increase probability decreased by 1.1 percentage points to 39.7%. Job loss probability over the next year dropped to its lowest level since December 2024 at 14%, while voluntary job leaving probability rose slightly to 18.8%. The likelihood of finding a new job if current employment is lost fell to 49.6%.

Household finance data showed an increase in expected income growth by 0.2 percentage points to 2.9%, matching its trailing average over the past year, while spending growth expectation dropped slightly to 4.8%. Credit access perceptions improved both currently and for future availability.

Debt payment concerns lessened with a decrease in perceived missed payment probability over the next three months down to 12%. Expected tax changes increased marginally, as did anticipated government debt growth reaching its highest level since October last year.

Interest rate rise on savings accounts appears less likely with a decline in perceived probability by 1.7 percentage points to 23.7%. Current financial situation perceptions improved significantly compared to last year with better outlooks anticipated moving forward.

Stock market projections were less optimistic with a slight decrease in perceived stock price increase likelihood over the next year dropping by just under half a percent.

The Survey of Consumer Expectations (SCE) provides insight into consumer views on various economic factors such as inflation rates, job prospects, earnings potential, spending habits, and credit access through a rotating panel format involving approximately 1,300 household heads nationwide each month.

For further details on this report or other inquiries related thereto contact Mariah Measey via phone or email provided below:

Mariah Measey

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Mariah.Measey@ny.frb.org