Another Record: Inflation Expectations Soar to High Level Ever Again
Inflation expectations among U.S. consumers jumped again in October after climbing unevenly for over a year, a survey from the Federal Reserve Bank of New York showed Monday.
Household expectations for inflation over the coming year climbed to 5.7 percent in October from 5.3 percent the previous month, according to the monthly Survey of Consumer Expectations. Median expected inflation over the next three years held steady at 4.2 percent.
Both the one-year and three-year are the highest since the survey began in 2013. This is the fourth consecutive record high in the one-year metric.
The survey breaks households down by income, education, and several other characteristics. All education levels and income levels expected more year-ahead inflation in October than a month prior. Households with high and low levels of numeracy expected more inflation.
In addition to expecting more inflation, Americans are less certain about inflation in both the one-year and three-year window.
Americans expect big price hikes on food, gasoline, and rent. Food and gas prices are both expected to climbed by more than nine percent. On average, rents are expected to rise 10.1 percent, a record high.
Expectations about the chances of losing a job declined and are now at their lowest level in records going back to 2013. The median probability of losing a job fell to 11 percent. The median probability of quitting rose to 20 percent, which is slightly below average.
The median perceived probability of missing a debt payment over the next three months increased by 1.3 percentage points to 11.2 percent, the highest reading since May 2020. Average income growth over the year ahead is 3.3 percent while average expected spending growth is 5.4 percent, a record high.