Press Release

Inflation Expectations Unchanged in June; Expectations about Household Finances Rebound

July 09, 2018

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data released the June 2018 Survey of Consumer Expectations, which shows no change in short- and medium- term inflation expectations. Households’ expectations about income, earnings and spending growth all recovered from a slight dip in May, as did year-ahead expectations about household financial situations.

The main findings from the June 2018 Survey are:


  • Median inflation expectations at both the one-year and three-year horizons were unchanged for the third straight month, at 3.0%. Inflation uncertainty declined at the one-year horizon (returning to its April 2018 level), but increased slightly at the three-year horizon.
  • Median home price change expectations increased 0.2 percentage points in June, to 3.9%, well above the 12-month trailing average of 3.3%. Home price growth uncertainty dipped slightly after reaching a 12-month high in May.
  • The median one-year ahead expected gasoline price change returned to its April level, decreasing to 4.8%, from 5.2% in May. Expectations for changes in the cost of medical care and college education each increased 0.3 percentage points, to 9.6% and 7.0%, respectively. Expectations for changes in food prices, on the other hand, declined 0.1 percentage point to 4.4%, while expectations for changes in rental prices were unchanged, at 5.7%.

Labor Market

  • Median one-year ahead earnings growth expectations returned to April’s level, climbing to 2.7%, from 2.5% in May. The increase was most pronounced among respondents with a high school degree or less. The increase was accompanied by a noticeable rise in earnings growth uncertainty.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased to 34.3%, from 34.1% in May, but remained slightly below the 12-month trailing average of 34.5%.
  • The mean perceived probability of losing one’s job in the next 12 months increased 1.2 percentage points, to 15.2% (substantially above the 12-month trailing average of 13.9%), while the mean probability of leaving one’s job voluntarily in the next 12 months was unchanged, at 21.4%.
  • The mean perceived probability of finding a job (if one’s current job was lost) decreased 1.3 percentage points, to 58.6%, which is slightly below its 12-month trailing average of 58.8%.

Household Finance

  • After decreasing for three straight months, median expected household income growth rebounded slightly in June, increasing 0.1 percentage points, to 2.7%. The increase was most pronounced among respondents with lower levels of education (high-school degree or less) and lower income (annual income below $50,000).
  • Median household spending growth expectations recovered in June, increasing 0.4 percentage points, to 3.4%. This reading had increased for three consecutive months at the beginning of the year before dipping in May.
  • The median expectation regarding year-ahead change in taxes (at current income level) was unchanged in June, at 2.2%, just above the trailing 12-month average of 2.1%.  
  • The perceived change in credit availability compared to a year ago worsened slightly in June, with the proportion of respondents reporting easier credit access declining to 23.6%, from 23.9% in May. In contrast, expectations for year-ahead credit availability improved slightly in June, with the proportion expecting easier credit access edging up to 21.7%, from 20.7% in May.
  • The average perceived probability of missing a minimum debt payment over the next three months increased for the third month in a row, to 12.4%, from 11.7% in May.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today increased to 37.1%, from 36.4% in May, matching March’s recent high.
  • One-year ahead expectations of households’ financial situations improved in June, with 11.8% of respondents expecting to be worse off financially, compared to 13.7% in May.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now than they are today decreased 1.6 percentage points, to 40.4%, and remained below the 12-month trailing average of 42.8%.

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 1,300 household heads. Respondents participate in the panel for up to 12 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.

Brian Manning
(212) 720-6143
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