Press Release

Consumers' Home Price Expectations Remain Subdued; Medium-Term Inflation Expectations Partially Rebound in March

April 08, 2019

NEW YORK— The Federal Reserve Bank of New York’s Center for Microeconomic Data released the March 2019 Survey of Consumer Expectations, which shows no change in the short-term inflation expectations and a slight increase in medium-term inflation expectations. Home price change expectations remain at their lowest level, while expected earnings and household income expectations improved slightly.

The main findings from the March 2019 Survey are:


  • Median inflation expectations at the one-year horizon remained stable at 2.8% in March, while increasing by 0.1 percentage point to 2.9% at the three-year horizon. Inflation uncertainty—or the uncertainty expressed by respondents regarding future inflation outcomes—increased slightly at both the one- and three-year horizons.
  • Median home price change expectations remained steady at 3.0% for the fourth consecutive month. This is the lowest reading of the series.
  • The median expected change in the cost of gas increased from 4.3% to 4.7% in March, the highest reading since June 2018. The median one-year ahead expected changes in the cost of food, medical care, college education, and rent changed little in March, all staying within 0.1 percentage points of the previous month’s expectations.   

Labor Market

  • Median one-year ahead earnings growth expectations increased from 2.5% in February to 2.6% in March, the highest reading since September 2018. These expectations, however, varied substantially across demographic groups. In particular, median earnings growth expectations reported by respondents over the age of 60 and respondents with a high school diploma or less actually decreased in March.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—stayed unchanged at 37.2% in March and remains above its 12-month trailing average of 35.7%.
  • The mean perceived probability of losing one’s job in the next 12 months decreased 0.3 percentage points to 14.3% in March, equal to its 12-month trailing average. This decrease was driven mostly by respondents under the age of 40. The mean probability of leaving one’s job voluntarily in the next 12 months increased from 21.2% to 21.8%.
  • The mean perceived probability of finding a job (if one’s current job was lost) decreased 0.7 percentage points to 58.6%. Although this is the lowest level since August 2018, it remains close to the series’ high of 60.1% reached in November 2017.

Household Finance

  • After declining for three consecutive months, the median expected household income growth rebounded to 2.8%. In contrast, median household spending growth expectations stayed unchanged at 3.1%.
  • Perceptions of credit access compared to a year ago improved slightly. The proportion of respondents who reported experiencing more difficulties accessing credit declined from 29.8% to 28.9%, while the proportion of those reporting easier access increased from 22.6% to 23.7%. Expectations for year-ahead credit availability also improved slightly in March. The proportion expecting improving conditions in credit access increased from 19.0% to 19.2%, while the proportion expecting worsening conditions in credit access declined from 32.5% to 32.3%.
  • The average perceived probability of missing a minimum debt payment over the next three months increased 0.7 percentage points to 11.6% in March. However, it remains below its 12-month trailing average of 12.0%.
  • The median expected year-ahead change in taxes (at current income level) increased from 2.5% in February to 2.8%, the highest reading since October 2016. The series has been trending upwards since reaching a low of 1.5% in February 2018.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now than it is today stayed at 34.8%, the lowest level since December 2017.
  • One-year ahead expectations as well as perceptions about households’ current financial situations deteriorated in March, with slightly lower proportions of respondents expecting to be and feeling better off financially.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now than they are today decreased slightly from 42.0% in February to 41.4% in March.

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 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.

Brian Manning
(212) 720-6143
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