Households expressed more optimism about their year-ahead financial situations, while earnings and household income growth expectations both rose in November. Other labour market expectations deteriorated and spending growth expectations continue to moderate.
Median inflation expectations increased by 0.1 percentage point at all three horizons in November. One-year-ahead inflation expectations increased to 3 per cent, three-year-ahead inflation expectations increased to 2.6 per cent and five-year-ahead inflation expectations increased to 2.9 per cent.
US households’ inflation expectations increased slightly at the short-, medium- and longer-term horizons, the November 2024 survey of consumer expectations by the Federal Reserve Bank of New York’s Centre for Microeconomic Data revealed.
Households expressed more optimism about their year-ahead financial situations, while earnings and household income growth expectations both rose in November.
Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at all three horizons.
Median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 3 per cent in November.
Mean unemployment expectations—or the mean probability that the US unemployment rate will be higher one year from now—ticked up by 0.5 percentage point to 35 per cent in November, remaining well below its trailing 12-month average of 37 per cent.
The mean perceived probability of losing one’s job in the next 12 months increased by 0.5 percentage point to 13.5 per cent. The mean probability of leaving one’s job voluntarily in the next 12 months decreased by 0.3 percentage point to 20.2 per cent.
The mean perceived probability of finding a job (if one’s current job was lost) decreased by 1.9 percentage points to 54.1 per cent. The decrease was broad-based across age and education groups.
The median expected growth in household income increased by 0.1 percentage point to 3.1 per cent in November.
Median household spending growth expectations declined by 0.2 percentage point to 4.7 per cent, the lowest reading since April 2021, but above pre-pandemic levels.
Perceptions of credit access compared to a year ago showed a larger share of households reporting no change and a smaller share reporting it is harder or easier. Expectations for future credit availability improved somewhat in November, with a smaller share of respondents expecting it will be harder to obtain credit in the year-ahead.
The median expectation regarding a year-ahead change in taxes (at current income level) declined by 0.6 percentage point to 3.4 per cent.
Fibre2Fashion News Desk (DS)
