NY Fed Survey Shows Cooling Inflation Expectations but Growing Consumer Financial Stress — Evening Brief – 06.08.26

U.S. consumers grew slightly more optimistic about inflation in May, but their outlook for employment, credit availability and household finances deteriorated, according to the latest Survey of Consumer Expectations from the Federal Reserve Bank of New York.

The survey showed median one-year-ahead inflation expectations declined by 0.1 percentage point to 3.5%, while expectations at the three-year and five-year horizons remained unchanged at 3.1% and 3.0%, respectively.

At the same time, households expressed growing concerns about their financial well-being and the broader labor market.

The average perceived probability of finding a job after losing one’s current position fell 2.3 percentage points to 43.7%, the lowest reading since December 2025 and well below the 12-month average of 46.8%. Meanwhile, the perceived likelihood of losing a job over the next year increased to 15.1%, above its trailing 12-month average.

Consumer sentiment regarding credit conditions also weakened. A smaller share of respondents said they expected credit to become easier to obtain over the next year, while perceptions of current credit access remained largely unchanged.

Financial stress indicators moved modestly higher. The average perceived probability of missing a minimum debt payment during the next three months rose 1.2 percentage points to 12.6%, though it remained slightly below its 12-month average.

The survey also revealed growing pessimism about household finances. More respondents reported being worse off financially than a year ago, pushing that measure to its highest level since January 2023. Expectations for future financial conditions also deteriorated, with the net share of households expecting their financial situation to improve falling to its lowest level since October 2022.