Press Release

Consumers’ Short-term Inflation, Income, and Spending Expectations Continue to Rise

July 12, 2021

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data released the June 2021 Survey of Consumer Expectations, which shows an increase in the median inflation expectations at the short-term horizon, while inflation expectations at the medium-term horizon remained unchanged. Households' labor market expectations continued to improve with unemployment expectations and the perceived likelihood of job loss both reaching new series' lows. Household's year ahead income and spending growth expectations continued their recent upward trend. Home price growth expectations remain elevated.

The main findings from the June 2021 Survey are:


  • Median inflation expectations increased 0.8 percentage point in June to 4.8% at the one-year horizon, reaching a new series' high, and remained unchanged at 3.6% at the three-year horizon. The increase in the short-term measure was driven mostly by respondents who have some college education. Our measures of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) reached new series' highs at both horizons.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes— increased at the short-term horizon and remained unchanged at the medium-term horizon. Both measures are elevated relative to pre-COVID-19 as well as their 2020 readings.
  • Median year-ahead home price change expectations remained unchanged at 6.2% in June, substantially higher than its 12-months trailing average of 3.7%. Median year-ahead home price growth uncertainty—or the uncertainty expressed regarding year-ahead home price growth outcomes—increased and reached a new series' high.
  • The median one-year ahead expected change in the cost of college education increased to 7.0% from 6.1% in May, its highest reading since April 2019. In contrast, the median expected changes in the price of food and gasoline decreased to 7.1% and 9.2%, respectively, from 8.0% and 9.8% in May. The median expected change in the cost of medical care and rent remained unchanged at 9.4% and 9.7%.*

Labor Market

  • Median one-year ahead expected earnings growth increased by 0.1 percentage point to 2.6% in June, its highest reading since the start of the pandemic (February 2020). The increase was driven by respondents who have at least some college education.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now— decreased to 30.7% from 31.9%, a new series' low.
  • The mean perceived probability of losing one's job in the next 12 months decreased from 12.6% to 10.9%, reaching a new series' low. The mean probability of leaving one's job voluntarily in the next 12 months also decreased to 18.6% from 18.7%, staying close to its trailing 12-month average of 18.1%.
  • The mean perceived probability of finding a job in the next three months (if one's current job were lost) increased by 0.2 percentage point to 54.2%, its highest reading since February 2020. The increase was driven by those with at least some college education. The series remains substantially below its 2019 average of 59.8%.

Household Finance

  • The median expected year-ahead household income growth increased to 3.0% in June from 2.8%. The increase was broad-based across age, income, and education groups.
  • Median household spending growth expectations increased by 0.2 percentage point to 5.2%, reaching a new series' high. The increase was most pronounced for respondents with some college education.
  • Perceptions of credit access compared to a year ago slightly improved. In contrast, expectations for future credit availability deteriorated, with more respondents expecting it will be harder to obtain credit in the year ahead.
  • The average perceived probability of missing a minimum debt payment over the next three months decreased to 9.6% from 9.7%. The series remains below its 2020 average of 11.4%.
  • The median expectation regarding a year-ahead change in taxes (at current income level) declined slightly to 4.6% from 4.7%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.5 percentage point to 29.9%. This is the highest reading of the series since May 2019. The increase was driven by those with an annual household income over $100,000.
  • Perceptions about households' current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago. In contrast, respondents were slightly more optimistic about their households' financial situations in the year ahead.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.5 percentage point to 40.2%, staying below its 2020 average of 44.3%.

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 
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