Press Release

Inflation Expectations Decline Across All Horizons; Income and Labor Market Expectations Strengthen

December 12, 2022

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the November 2022 Survey of Consumer Expectations , which shows that inflation expectations decreased in November at the short, medium, and longer terms. Home price growth expectations continued to decline. Labor market expectations strengthened, while household income growth expectations increased to a new series high.

The main findings from the November 2022 Survey are:


  • Median inflation expectations decreased at both the one- and three-year-ahead horizons in November, by 0.7 percentage point (to 5.2%) and by 0.1 percentage point, to 3.0%, respectively. Both decreases were broad-based across education and income groups. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at both horizons.  
  • Median five-year-ahead inflation expectations, which have been elicited in the monthly SCE core survey on an ad-hoc basis since the beginning of this year and were first published in July 2022, also decreased, by 0.1 percentage point to 2.3%. Disagreement across respondents in their five-year-ahead inflation expectations decreased in November.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at both the short-term and medium-term horizon.
  • Median home price growth expectations dropped by 1.0 percentage point to 1. 0%, its lowest reading since May 2020. The decrease was broad-based across education and income groups but most pronounced for respondents from the South. Since August 2022, home price growth expectations have been well below their pre-pandemic levels.
  • Median year-ahead expected price changes declined by 0.6 percentage point for gas (to 4.7%), 0.8 percentage point for food (to 8.3%), and 0.1 percentage point for rent . The median expected change in the cost of medical care remained unchanged at 9.6%, while the median expected change in the cost of college education increased by 0.1 percentage point to 9.4%. *

Labor Market

  • Median one-year-ahead expected earnings growth decreased by 0.2 percentage point to 2.8% in November. The decline was driven by respondents without a college degree and with annual household incomes below $100k. The series has been moving between a narrow range of 2.8 to 3.0% since September 2021.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.7 percentage points to 42.2%. The decrease was driven by respondents with annual household incomes above $50k.
  • The mean perceived probability of losing one’s job in the next 12 months decreased by 0.3 percentage point to 11.7%. Similarly, the mean probability of leaving one’s job voluntarily in the next 12 months decreased by 0.9 percentage point to 18.6%.
  • The mean perceived probability of finding a job (if one’s current job was lost) increased by 0.2 percentage point to 58.2%, its fourth consecutive monthly increase and the highest reading since February 2020.

Household Finance

  • The median expected growth in household income increased by 0.2 percentage point to 4.5% in November, a new series high. The increase was driven by respondents with no more than a high school education.
  • Median household spending growth expectations decreased slightly to 6.9% from 7.0% in October.
  • Perceptions of credit access compared to a year ago deteriorated in November, with the share of households reporting it is harder to obtain credit than one year ago increasing to a new series high. Expectations for future credit availability were unchanged, continuing to indicate that respondents expect credit access to tighten further.
  • The average perceived probability of missing a minimum debt payment over the next three months increased to 11.8% from 11.6% in October, remaining comparable to rates that prevailed leading up to the pandemic.
  • The median expectation regarding a year-ahead change in taxes (at current income level) increased by 0.3 percentage point to 4.6%.
  • Median year-ahead expected growth in government debt continued its declining trend and decreased by 0.1 percentage point to 10.1%, its lowest reading since March 2020.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 3.1 percentage points to 32.4%, its lowest reading since February 2022.
  • Perceptions about households’ current financial situations compared to a year ago improved slightly. Year-ahead expectations about households’ financial situations also improved in November.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.8 percentage points to 35.7%.

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, this 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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