Press Release

Household Expectations Remain Stable in July; Inflation Expectations Decline Slightly

August 12, 2019

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data released the July 2019 Survey of Consumer Expectations, which shows a 0.1 percentage points decline in both short- and medium-term inflation expectations. Most other household expectations were mostly stable in July. In particular, house price, income, and spending expectations were unchanged. Expectations about the labor market and household finance remained optimistic. 

The main findings from the July 2019 Survey are:


  • Median inflation expectations declined by 0.1 percentage points at both the one- and three-year horizons to 2.6% in July.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—also fell at both horizons.
  • Median home price change expectations remained unchanged at 3.0% for the seventh consecutive month. Home price growth uncertainty decreased slightly.
  • The median one-year ahead expected gasoline price change rebounded by 0.4 percentage points to 4.6% in July. Expectations for changes in the cost of a college education increased by 0.6 percentage points to 5.9%. In contrast, expectations for changes in food prices fell to 4.3% from 4.7% in June, tying the lowest value recorded this calendar year. Expectations for changes in the cost of medical care and rent remained mostly stable at 7.5% and 5.3%, respectively.  

Labor Market

  • Median one-year ahead expected earnings growth fell 0.1 percentage points to 2.4% in July. The series has held within a narrow range of 2.4% to 2.6% since December 2018.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.2 percentage points to 36.1%, slightly below the 12-month trailing average of 36.4%.
  • The mean perceived probability of losing one’s job in the next 12 months increased by 0.2 percentage points to 13.7% but remains substantially lower than the 12-month trailing average of 14.3%. The mean probability of leaving one’s job voluntarily in the next 12 months increased by 1.2 percentage points to 21.6%.
  • The mean perceived probability of finding a job (if one’s current job was lost) dropped from last month series’ high of 63.7% back to 59.8%, remaining above the 12-month trailing average of 59.5%. The decrease was most pronounced among respondents over 60 and respondents with a high school diploma or less.

Household Finance

  • Median expected household income growth stayed constant at 2.9% in July.
  • Median household spending growth expectations also remained unchanged at 3.3%.
  • Credit access perceptions and expectations deteriorated slightly in July. The proportion of respondents reporting easier credit access than 12 months ago declined 0.9 percentage points to 24.1%, and the proportion of respondents who expect easier credit conditions 12 months from now also declined 1.9 percentage points to 18.8%.
  • The average perceived probability of missing a minimum debt payment over the next three months increased from a series low of 10.6% in June to 11.7% in July, remaining below the 12-month average of 11.9%. The increase was most pronounced for respondents under the age of 40 and those with household incomes under $50,000.
  • The median expectation regarding year-ahead change in taxes (at current income level) decreased to 2.7% from 2.9% in June.
  • After declining for six consecutive months to a four-year low of 28.1% in June, the mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased to 29.0% in July, but remains substantially below the 12-month trailing average of 35.0%.
  • One-year ahead expectations as well as perceptions about households’ current financial situations improved slightly in July, with lower shares of respondents expecting to be and reporting to be worse off financially.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased to 41.1% from 38.8% in June. Stock prices expectations have remained relatively stable around 40% over the past 12 months.

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 regarding consumers’ outlooks. 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.

Shelley Pitterson
(917) 698-0510
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