The Federal Reserve Bank of New York's June Consumer Expectations Survey results showed that American consumers' inflation concerns have increased. According to the survey of about 1,300 households, short-term inflation expectations rose significantly.
The median inflation expectation for the next 12 months rose 0.2 percentage points from the previous month to 3.7 percent. This was the highest level since September 2023. The three-year medium-term expectation also rose 0.2 points to 3.3 percent, the highest since June 2022. The long-term expectation held steady at 3 percent.
Expectations for the labor market showed signs of improvement. Job-finding expectations rose, while expectations of job loss and the unemployment rate declined. Consumers' optimism about their own financial situations grew, but credit access expectations deteriorated slightly.
Cost expectations for various spending categories presented a mixed picture. The expected increase in gasoline prices dropped 3.5 percentage points to 1.5 percent, the lowest since August 2022. Expectations for food and college tuition costs also fell. In contrast, the expected increase in healthcare costs rose 0.5 points to 9.4 percent, and the expected rent increase climbed 0.9 points to 8.3 percent.
The expected household income growth rose to 3 percent, while spending growth expectations remained at 5 percent. In the US, the Consumer Price Index (CPI) increased 4.2 percent on an annual basis in May. Official CPI data for June is expected to be released on July 14.
