NY Fed Jan. survey of consumer expectations shows one year inflation 3.0% vs 3.0% last

• Prior month one year inflation expectations 3.0%
• one year and three year inflation expectations remain unchanged at 3.0%
• five year inflation expectations 3% up from 2.7% prior month
• January saw larger expected rise for food, gas, rent, college, medical prices.
• January expected spending levels decline to lowest level since January 2021.
• Labor market expectations were mixed
• Perceptions of access to credit improved in January.
• Household lower perception of financial situation in January

Inflation Expectations:

• Unchanged at 3.0% for the 1-year and 3-year horizons.
• Increased to 3.0% (+0.3 ppt) for the 5-year horizon.

Commodity Price Expectations (Year-Ahead):

• Gas: +2.6% (+0.6 ppt).
• Food: +4.6% (+0.6 ppt).
• Medical care: +6.8% (+1.0 ppt).
• College costs: +5.9% (+0.2 ppt).
• Rent: +6.0% (+0.5 ppt).

Job Market Expectations:

• Probability of losing one’s job: Increased to 14.2% (+2.3 ppt).
• Probability of finding a job within 3 months: Increased to 51.5% (+1.3 ppt).

Household Spending Expectations:

• Declined to 4.4% (-0.4 ppt), the lowest since January 2021.

More Details on Prices:

• Median home price growth expectations rose by 0.1 percentage point to 3.2%. This increase was driven by respondents in the West census region. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
• Year-ahead commodity price expectations rose across the board, increasing by 0.6 percentage point for the price of gas to 2.6%, 0.6 percentage point for the price of food to 4.6%, 1.0 percentage point for the cost of medical care to 6.8%, 0.2 percentage point for the cost of college to 5.9%, and 0.5 percentage point for rent to 6.0%.

More details on Employment

• Median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 3.0% in January. This series has been moving within a narrow range between 2.7% and 3.0% since January 2024.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.6 percentage point to 34.0%, the measure’s lowest reading since July 2021. The decline was driven by respondents with no college degree, those with an annual income below $100,000, and those above age 40.

More details on Household

• The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.9 percentage point to 13.3%. This series remains above its 12-month trailing average of 13.0%.
• The median expected year-ahead change in taxes at current income level increased by 0.2 percentage point to 3.2%, but remains well below its 12-month trailing average of 3.9%.
• Median year-ahead expected growth in government debt increased by 0.1 percentage point to 6.0%. This reading is well below the series 12-month trailing average of 8.6%.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.2 percentage point to 25.0%.
• Perceptions about households’ current financial situations compared to a year ago deteriorated in January, with the net share of households reporting a worse versus better situation compared to a year ago rising. Similarly, year-ahead expectations about households’ financial situations also deteriorated in January.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.5 percentage point to 40.3%.

This article was written by Greg Michalowski at www.forexlive.com.