Press Release

April Survey of Consumer Expectations Shows Rising Inflation Expectations

May 14, 2018

NEW YORK – The Federal Reserve Bank of New York’s Center for Microeconomic Data released the April 2018 Survey of Consumer Expectations, which finds modest increases in short- and medium-term inflation expectations. Households’ year-ahead expectations of spending and home price growth also increased.

The main findings from the April 2018 Survey are:


  • Median inflation expectations increased to 3.0% at both the one-year and three-year horizon, increasing by 0.2% and 0.1% respectively since March. Both measures have been trending upwards since August of last year. The last time both measures reached this level was during the temporary uptick in inflation expectations in early 2017. While this month’s increase in short-term inflation expectations was broad-based across income groups, the increase in medium-term inflation expectations was driven by respondents with incomes at $50,000 or higher.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at both horizons.
  • Median home price change expectations increased from 3.5% in March to 3.7% in April, its highest reading since November 2014 and well above its trailing 12-month average of 3.3%. The increase was driven by respondents from the South and Midwest.
  • The median one-year ahead expected gasoline price change increased from 4.6% in March to 4.8% in April, while expectations for changes in food prices rose from 4.5% to 4.7%. Expectations for changes in the cost of medical care, college education and rent also increased from 8.8%, 5.9% and 5.2% to 8.9%, 6.3% and 5.5%, respectively.

Labor Market

  • Median one-year ahead earnings growth expectations increased slightly from 2.6% in March to 2.7% in April, remaining within a narrow 2.6%-2.7% range since November 2017.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased slightly for the second month in a row from 34.4% in March to 34.9% in April, equal to its trailing 12-month average.
  • The mean perceived probability of losing one’s job in the next 12 months fell from 13.9% in March to 13.7%, while the mean probability of leaving one’s job voluntarily in the next 12 months increased from 19.3% to 20.5%.
  • The mean perceived probability of finding a job (if one’s current job was lost) declined slightly from 57.6% in March to 57.1%, its lowest value since May 2017.

Household Finance

  • Median expected household income growth remained unchanged at 2.9% in April, 0.1% above its trailing 12-month average.
  • Median household spending growth expectations increased for the third month in a row from 3.1% in March to 3.3% in April, well above its trailing 12-month average of 2.9%.
  • Perceptions of credit access compared to a year ago and expectations for year-ahead credit availability both indicated greater dispersion, with slightly larger proportions reporting worsening and improving conditions.
  • The average perceived probability of missing a minimum debt payment over the next three months increased slightly from 10.7 % in March to 11.0% in April, remaining at the low end of the 10.7%-17.2% range observed since the start of the survey in June 2013.
  • The median expectation regarding year-ahead change in taxes (at current income level) increased from 1.7% in March to 1.9% in April, retreating a little further from its series low of 1.5% reached in February 2018. The increase was broad-based across age, education and income groups.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today decreased slightly from 37.1% in March to 36.8% in April, remaining above its trailing 12-month and series’ average of 35.4% and 31.6% respectively.
  • Perceptions of the household’s financial situation compared to a year ago deteriorated slightly, while one-year-ahead expectations of changes in the household’s financial situation remained unchanged.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now than they are today decreased to 41.5%, its third consecutive decrease since its 44.9% reading in January and its lowest level since November 2016.
  • Median year-ahead expected growth in government debt increased from 7.0% in March to 7.6% in April, remaining well above its year-ago value of 5.3%.  

About the Survey of Consumer Expectations (SCE)
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 1,300 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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