Inflation Expectations Tick Higher Across All Time Horizons: NY Fed 

U.S. consumers’ inflation expectations ticked higher across three time horizons, while their outlook for their own earnings growth over the next year increased slightly more, according to the Federal Reserve Bank of New York’s November 2024 Survey of Consumer Expectations. In addition, consumer largely anticipate they will keep up with debt payments over the next three months. 

Median inflation expectations rose 0.1% at the one-year, three- year, and five-year horizons. The median year-ahead inflation expectation rose to 3.0%, three-year-ahead ticked up to 2.6%, and five-year ahead jumped to 2.9%. However, uncertainty over median inflation outcomes also increased across all time horizons. 

Median one-year-ahead earnings growth expectations rose 0.2% to 3.0%, still within a range of 2.7% to 3.0% that the metric has kept at since January 2024. 

Mean unemployment expectations, or the mean probability that the U.S. unemployment rate will be higher a year from now, rose 0.5% to 35.0%, still below its trailing 12-month average of 37.0%. Consumers were also slightly more worried about their own employment. The mean perceived probability of losing one’s job in the next 12 months increased by 0.5% to 13.5%. 

Household income growth expectations, though, are slightly lower than the earnings growth outlook, rising by 0.1% to 3.1%. That series has been holding within a 2.9% to 3.3% range since January 2023. 

Median household spending growth expectations dipped 0.2% to 4.7%, the lowest since April 2021, but above pre-pandemic levels. 

The average perceived probability of missing a minimum debt payment over the next three months dropped by 0.7% to 13.2%, the lowest reading since June 2024.