Press Release

Inflation Expectations Remain Unchanged in January

February 10, 2020

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data released the January 2020 Survey of Consumer Expectations, which shows no change in the short- and medium-term inflation expectations. The expected change in the cost of medical care declined to a new series’ low. Consumers remain optimistic about labor market outcomes with year-ahead earnings growth, job finding, and job loss expectations all improving. The average expectation of an increase in U.S. stock prices continued on its upward trend.

The main findings from the January 2020 Survey are:


  • Median inflation expectations at both the one-year and three-year horizons were unchanged at 2.5% in January.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased slightly both at the one-year and three-year horizons.
  • Median home price change expectations were unchanged at 3.0%, the third consecutive reading at this level. The reading is also similar to the levels observed throughout most of 2019.
  • The median one-year ahead expected change in the price of gasoline remained unchanged at its lowest level since July 2017. On the other hand, expectations for changes in the cost of a college education, medical care, and rent all fell in January. Notably, the measure for the expected change in the cost medical care reached a new series’ low at 5.7%.

Labor Market

  • Median one-year ahead expected earnings growth increased to 2.6% in January, from 2.2% in December. The reading is above the 12-month trailing average of 2.4%. The increase was broad-based across age and income groups.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased slightly to 34.8% in January, from 34.6% in December.
  • The mean perceived probability of losing one’s job in the next 12 months declined 0.7 percentage point to 14.7% in January. The decline was driven by respondents with household incomes more than $100,000 and those over the age of 40. The mean probability of leaving one’s job voluntarily in the next 12 months increased from 20.9% in December to 21.2% in January. The increase was most pronounced among respondents with a high school degree or less and those below the age 40.
  • The mean perceived probability of finding a job (if one’s current job was lost) increased from 58.8% in December to 59.8% in January, remaining only marginally below the 12-month trailing average of 59.9%.

Household Finance

  • Median expected household income growth was unchanged at 2.9% in January, the third consecutive reading at this level. The reading is just above its trailing 12-month average of 2.8%.
  • Median household spending growth expectations increased 0.1 percentage point to 3.0% in January. The reading remains well below its trailing 12-month average of 3.2%.
  • Perceptions of credit access compared to a year ago improved with a greater proportion of respondents reporting easier credit access and a smaller proportion of respondents reporting harder credit access. On the contrary, expectations for year-ahead credit availability deteriorated slightly.
  • The average perceived probability of missing a minimum debt payment over the next three months declined from 12.5% to 11.8% in January, just above its 12-month average of 11.6%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now declined to 26.5% in January, from 27.4% in December.
  • Perceptions about households’ current financial situations compared to a year ago were largely stable. On the other hand, one-year ahead expectations about households’ financial situations deteriorated slightly.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased for the third consecutive month to 41.4% in January from 40.4% in December.

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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