Press Release

Further Rise in Consumers’ Short- and Medium-Term Inflation Expectations

September 13, 2021

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data released the August 2021 Survey of Consumer Expectations, which shows that short- and medium-term inflation expectations rose to new series highs. Home price growth expectations continued to moderate in August but remain elevated.  Perceptions about households' current financial situations improved and income growth expectations rose to a new series high.  

The main findings from the August 2021 Survey are:


  • Median one-year-ahead inflation expectations increased by 0.3 percentage point to 5.2% in August, the tenth consecutive monthly increase and a new series high. Median inflation expectations at the three-year horizon also increased by 0.3 percentage point to a new series high of 4.0%. Both increases were broad based across age and income groups. Our measure of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased slightly at the one-year horizon and was unchanged at the three-year horizon. Both measures of disagreement remain elevated compared to their pre-COVID-19 levels.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at both the short- and medium-term horizons to new series highs. Both measures remain well above the levels observed before the COVID-19 pandemic.
  • Median year-ahead home price change expectations decreased slightly to 5.9% in August from 6.0% in July, marking the third consecutive monthly decline. The decrease was driven primarily by respondents under the age of 40 and was largest for those who live in the "South" and "Northeast" Census regions.
  • Expectations about year-ahead price changes jumped by 0.8 percentage point for food (to 7.9%), increased by 0.2 percentage point for rent (to 10.0%), and increased by 0.2 percentage point for medical care (to 9.7%). The expected price of college education decreased by 0.5 percentage point (to 7.0%).  The median one-year-ahead expected change in the price of gas increased by 1.1 percentage points to 9.2%.*

Labor Market

  • Median one-year-ahead expected earnings growth fell 0.4 percentage point in August to 2.5%, comparable to its February 2020 level. The decrease was driven mostly by respondents over the age of 40.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased by 3.3 percentage points in August to 35.0%.
  • The mean perceived probability of losing one's job in the next 12 months increased slightly in August to 12.4% from 12.2% in July, but remains near the series low. The mean probability of leaving one's job voluntarily in the next 12 months also increased to 20.0% from 19.7%.
  • The mean perceived probability of finding a job (if one's current job was lost) fell to 54.9% in August from 57.0% in July. The decrease was most pronounced among respondents aged 60 and over.

Household Finance

  • The median expected growth in household income increased by 0.1 percentage point to 3.0%, a new series high. The increase was most pronounced for the respondents with household incomes less than $50,000.
  • Median household spending growth expectations fell slightly to 5.0% in August from 5.1% in July, but remain elevated relative to pre-COVID-19 levels.
  • Perceptions of credit access compared to a year ago slightly improved in August. Expectations for future credit availability deteriorated slightly, with fewer respondents expecting it will be easier to obtain credit in the year ahead compared to July.
  • The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.7 percentage point to 9.6%, which is slightly below the 12-month trailing average of 10.1%. The decrease was broad based across age, income, and education groups.
  • The median expectation regarding a year-ahead change in taxes (at current income level) was unchanged at 4.6%. 
  • Median year-ahead expected growth in government debt decreased to 15.1% in August, from 15.7% in July.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.4 percentage point in August to 27.4%.
  • Perceptions about households' current financial situations compared to a year ago improved in August, with more respondents reporting being financially better off than they were a year ago. Similarly, year-ahead expectations improved, with fewer households expecting a worse financial situation in the next 12 months.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now remained unchanged at 39.0%.

  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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