Press Release

Inflation Expectations Increase in Short-Term, Decline in Medium-Term; Consumers’ Spending Expectations Rise

December 13, 2021

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the November 2021 Survey of Consumer Expectations, which shows another increase in short-term inflation expectations, but a decline in medium-term inflation expectations. However, consumers conveyed increased uncertainty about future inflation. Year-ahead spending growth expectations increased to a new series high. While remaining elevated, home price growth expectations slightly declined.

The main findings from the November 2021 Survey are:


  • Median one-year-ahead inflation expectations increased to 6.0% from 5.7% in October. Median three-year ahead inflation expectations decreased to 4.0% from 4.2% in both September and October. This is the first decline in the three-year measure since June 2021, and only the second decline since October 2020. The decline in medium-term expectations was driven by respondents without a college degree. Measures of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased at both horizons to new series highs.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—increased at both the short- and medium-term horizons, with both reaching new series highs.
  • Median year-ahead home price change expectations decreased to 5.0% from 5.6%. The measure, which rose sharply during the Spring, is now at its lowest level since March 2021, but remains well above its pre-pandemic February 2020 reading of 3.1%. The decrease was driven by respondents without a college degree and was largest for those who live in the “South” and “Northeast” Census regions.
  • Expectations about year-ahead price changes were flat for rent (at 10.0%), decreased by 0.2 percentage point for gas prices (to 9.2%), increased by 0.1 percentage point for food prices (to 9.2%), and increased by 0.2 percentage point for the cost of medical care (to 9.6%). The median one-year ahead expected change in the cost of a college education increased by 1.6 percentage points to 9.1%, its highest reading since March 2015.*

Labor Market

  • Median one-year-ahead expected earnings growth retreated 0.2 percentage point in November to 2.8%, from its series high in October. The decrease was largest for respondents with annual household incomes under $50,000.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased by 0.6 percentage point to 36.1%.
  • The mean perceived probability of losing one’s job in the next 12 months rose to 13.0% from 11.0% but remains well below its pre-pandemic reading of 13.8% in February 2020. The mean probability of leaving one’s job voluntarily in the next 12 months also increased to 20.2%, from 20.0%.
  • The mean perceived probability of finding a job (if one’s current job was lost) declined to 55.9% from 56.6%, but remains well above its 12-month trailing average of 51.9%.

Household Finance

  • The median expected growth in household income fell by 0.1 percentage point from its series high in October, to 3.2%.
  • Median year-ahead household spending growth expectations jumped up by 0.3 percentage point to 5.7%, a new series high. The increase was largest for respondents with annual household incomes under $50,000.
  • Perceptions of credit access compared to a year ago deteriorated slightly in November, with fewer respondents finding it easier to obtain credit now than a year ago. Expectations about future credit availability deteriorated as well, with fewer respondents expecting it will be easier to obtain credit in the year ahead.
  • The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.1 percentage points, to 10.0%, which is slightly below the 12-month trailing average of 10.2%.
  • The median expectation regarding a year-ahead change in taxes (at current income level) was unchanged at 4.7%. 
  • Median year-ahead expected growth in government debt decreased 2.1 percentage points to 12.5%, its lowest reading since December 2020.
  • The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased to 28.7%, from 27.0%.
  • Perceptions about households’ current financial situations compared to a year ago deteriorated in November, with more respondents reporting being financially worse off than they were a year ago. Respondents were also more pessimistic about their household’s financial situation in the year ahead, with fewer respondents expecting their financial situation to improve a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.5 percentage point to 39.1%, the first increase since April 2021.

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. For further information on the SCE, please refer to an overview of the survey methodology here, the interactive chart guide, and the survey questionnaire.

* 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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