Press Release

Inflation Expectations Increase in the Short-Term, Remain Stable in the Medium-Term

May 10, 2021

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data released the April 2021 Survey of Consumer Expectations, which shows that median inflation expectations increased at the short-term horizon but remained unchanged at the medium-term horizon. Median year-ahead home and rent price growth expectations also increased, with both reaching new series highs. Households' year-ahead spending growth expectations remain elevated.

The main findings from the April 2021 Survey are:


  • Median year-ahead inflation expectations increased to 3.4% in April from 3.2% in March, while remaining unchanged at 3.1% at the three-year horizon. The one-year ahead measure is now at its highest level since September 2013. Our measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) declined at the one-year horizon and was unchanged at the three-year horizon, with both measures remaining elevated relative to pre-COVID-19 levels.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at both horizons.
  • Median home price change expectations, which have been trending upward since reaching a series' low of 0.0% in April 2020, increased sharply from 4.8% in March to 5.5% in April, a new series high. The increase was broad-based across age, education and income groups, and was largest in the South and Northeast.
  • The median one-year ahead expected change in gas prices retreated from its series high of 9.9% in March to 9.2% in April. Similarly, median expectations regarding changes in the cost of medical care decreased from 9.3% in March to 9.1% in April. Expectations about the cost of rent and a college education instead increased from 9.3% and 5.6% in March to 9.5% and 5.9% in April, respectively. The increase in rent growth expectations is the fifth consecutive increase, and the current reading is a new series' high.*

Labor Market

  • Median one-year ahead expected earnings growth increased from 2.0% in March to 2.1% in April, remaining well below its February 2020 level of 2.6%.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased by 0.2 percentage points to 34.6% in April, remaining below its trailing 12-month average of 38.7%.
  • The mean perceived probability of losing one's job in the next 12 months increased by 2.2 percentage points to 15.0% in April, remaining well below its reading of 20.9% a year-ago. The mean probability of leaving one's job voluntarily increased by 2.4 percentage points to 19.1% in April, moving slightly above its reading of 17.3% a year-ago. Both increases were broad-based across age, education and income groups.
  • The mean perceived probability of finding a job (if one's current job was lost) edged up from 48.7% in March to 49.8% in April. This series has remained relatively stable after dropping nearly 12 percentage points between February and April of 2020.

Household Finance

  • Median expected household income growth fell from 2.8% in March to 2.4% in April, remaining above its trailing 12-month average of 2.2%. The decline was broad-based across age and education groups.
  • Median household spending growth expectations retreated slightly from a six year high level of 4.7% in March to 4.6% in April. The decline was driven by higher income (household income above $100,000) respondents.
  • Perceptions of credit access compared to a year ago and expectations for year-ahead credit availability both improved, with a slightly larger share of respondents finding and expecting credit to be easier to obtain.
  • The average perceived probability of missing a minimum debt payment over the next three months increased slightly from 9.6% in March to 10.0% in April, remaining below its pre-COVID reading of 11.4% in February 2020.
  • The median expectation regarding a year-ahead change in taxes (at current income level) increased from 4.2% in March to 4.4% in April.
  • Median year-ahead expected growth in government debt fell from 14.6% in March to 14.4% in April, remaining well above pre-pandemic levels.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now declined from 29.4% in March to 28.7% in April, while remaining above its trailing 12-month average of 27.4%.
  • Perceptions about households' current financial situations compared to a year ago improved in April, with fewer respondents reporting to be worse off now. Expectations about households' financial situations in the year ahead were largely stable.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now rose from 41.2% in March to 42.4% in April.

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.

* Due to a data recording error in the “one-year ahead commodity price change expectations” series, the data for this series has been revised going back to October 2020.

Mariah Measey
(347) 978-3071 
By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement.   Close