US Short-Term Inflation Expectations Rise to Multi-Year High in NY Fed Survey
- NY Fed: 12-month inflation outlook hits 3.9%, highest since May 2023.
- 3-year inflation expectations rise to 3.3%; 5-year steady at 3.0%.
- Commodity/gasoline prices drive rise; consumers less optimistic on equities.
The New York Federal Reserve’s Survey of Consumer Expectations for September indicated a significant increase in short-term inflation outlooks among US households. The median expectation for inflation over the next 12 months rose to 3.9%, up 0.3 percentage point from 3.6% in August, marking its highest level since May 2023. Similarly, three-year inflation expectations also edged higher to 3.3% from 3.2%. However, the outlook for five-year inflation remained stable at 3.0%. The survey also noted an improvement in labor market sentiment and an increase in year-ahead expected spending, reaching its highest point since May 2023.
The New York Fed’s September Survey of Consumer Expectations revealed that one-year ahead inflation expectations rose to 3.9% from 3.6%, marking the highest level since May 2023. Three-year ahead expectations also edged up from 3.2% to 3.3%, while five-year ahead expectations remained unchanged at 3%, still above the Federal Reserve’s 2% target. The increase in short-term expectations was primarily attributed to rising commodity and gasoline prices. Additionally, the survey indicated that consumers became less optimistic about equity prices over the next year.