Press Release

Consumers’ Inflation Expectations Drop and Spending Growth Expectations Remain Low

June 12, 2017

NEW YORK—The May 2017 Survey of Consumer Expectations shows that household inflation expectations declined at the one-year ahead horizon and dropped noticeably at the three-year ahead horizon. Home price change expectations continued to edge up. The outlook of consumers in several other dimensions showed few signs of optimism—spending growth expectations remained at their series low and perceived current and expected future financial situations worsened from the previous month.

The main findings from the May 2017 Survey are:


  • Inflation expectations declined at both horizons—dropping noticeably at the three-year ahead horizon. Median one-year ahead inflation expectations decreased from 2.8% in April to 2.6%. Median three-year ahead inflation expectations dropped from 2.9% in April to 2.5%, their lowest reading since January 2016. For both horizons, the declines were most notable for younger household heads (those less than 40 years old) and those with a high school degree or less. While expectations declined for all income groups, they were largest for lower-income households (below $50,000 household income). Inflation uncertainty at both horizons continues to remain at series low.
  • Median year-ahead home price change expectations continued their upward trend, reaching 3.5%, up from 3.4% in April and 3.1% in February this year. This was driven by an uptick in expectations for respondents residing in the Midwest.

Labor Market

  • Median one-year ahead earnings growth expectations decreased from 2.5% in April to 2.2%. This series has been oscillating between 2% and 2.5% since late-2015.
  • The mean perceived probability of losing one’s job in the next 12 months increased from 13.2% in April to 13.6%, still towards the lower end of the range seen since the start of the dataset in 2013. The increase was driven by respondents above the age of 60. The mean probability of leaving one’s job voluntarily in the next 12 months declined from 19.9% to 19.4%, its lowest level since July 2013.  
  • The mean perceived probability of finding a job (if one’s current job was lost) was little changed, increasing slightly from 56.5% in April to 56.7%.
  • Mean unemployment expectations (the mean probability that the U.S. unemployment rate will be higher one year from now) edged up from 36.5% in April to 37.5%.  

Household Finance

  • Median expected household income growth was largely unchanged from the previous month, at 2.7%.  Median household spending growth expectations remained at 2.6%, the series low reached in April. 
  • The perceived change in credit availability (compared to a year ago) improved somewhat from April. However, year-ahead expected credit availability worsened slightly from the prior month.
  • The average perceived probability of missing a minimum debt payment over the next three months increased from 12.2% in April to 13.1%, but remains below its 2016 average of 13.3%. The increase was driven by respondents with household income of $50,000 or more, and those ages 60 or less.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today dropped to 37.2%, down from 39.2% in April and from its series high of 41.8% in March.
  • Households’ financial situation—both their perception of their current status compared to a year ago as well as their one-year ahead expectation—deteriorated from the previous month.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now than they are today rose from 43.8% in April to 44.0%, and continues to be considerably higher than the 2016 average of 38.8%.

About the Survey of Consumer Expectations

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty in expectations for the main outcomes of interest. Expectations are also available by age, geography, income, education and numeracy. 

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,200 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel allows us to observe the changes in expectations and behavior of the same individuals over time.

The survey is conducted on our behalf by The Demand Institute, a non-profit organization jointly operated by The Conference Board and Nielsen. The sampling frame for the SCE is based on that used for The Conference Board’s Consumer Confidence Survey (CCS). Respondents to the CCS, itself based on a representative national sample drawn from mailing addresses, are invited to join the SCE internet panel.

Betsy Bourassa
(212) 720-6885
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