A survey released by the Federal Reserve Bank of New York on Wednesday showed U.S. consumers raised their inflation expectations for the year ahead in September, with the one-year reading climbing to 3.9% from 3.6% in August. The figure marked the highest level since May 2023. Longer-term expectations were steadier: the three-year outlook edged up to 3.3% from 3.2%, while the five-year expectation held at 3%.
The survey also pointed to weaker household sentiment around finances. Respondents lowered their assessments of both current and future financial conditions and said credit had become harder to obtain. At the same time, concern about missing debt payments eased. Labor market expectations improved versus August as well. Households saw a lower probability that unemployment would be higher a year from now, reported less concern about involuntary job loss over the next 12 months, and expressed greater confidence in finding a new job if they were to lose their current one.
A survey released Wednesday by the Federal Reserve Bank of New York showed U.S. consumers lifted their inflation expectations for the year ahead in September, pushing the reading to its highest level in more than three years. The report also showed households grew more downbeat about both current and future financial conditions.
One-year inflation expectation rose to 3.9%
Respondents said they expect inflation to reach 3.9% one year from now, up from 3.6% in August and the highest level since May 2023. The three-year inflation expectation increased to 3.3% from 3.2%, while the five-year expectation was unchanged at 3%.
Households turned more cautious on finances and credit access
The New York Fed survey showed households in September lowered their assessments of both current and future financial conditions. Respondents also said it had become harder to obtain credit. Even so, concern about being unable to make debt payments on time eased.
Labor market expectations improved from August
Compared with August, respondents saw a lower probability that the unemployment rate would be higher one year from now. Concern about involuntary job loss over the next year also declined, and confidence in finding a new job after losing a current one increased.
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