Press Release

Short-Term Inflation Expectations Continue to Decline, Tick up Slightly in Longer Term

January 09, 2023

NEW YORK—The Federal Reserve Bank of New York's Center for Microeconomic Data today released the December 2022 Survey of Consumer Expectations, which shows that inflation expectations continued to decline in the short term and were unchanged over the medium term. Longer-term inflation expectations edged up slightly. Household spending expectations fell sharply in December, while income growth expectations rose to a new series high. Home price expectations rose slightly, but remain below their pre-pandemic levels. Households' perceptions about their current financial situation and their expectations about their future financial situation one year from now improved in December.

The main findings from the December 2022 Survey are:


  • Median one-year-ahead inflation expectations continued to decline in December, falling by 0.2 percentage point to 5.0%, its lowest reading since July 2021. In contrast, three-year-ahead inflation expectations were unchanged in December at 3.0%. The survey's measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one-year horizon and was unchanged at the three-year horizon.  
  • Median five-year-ahead inflation expectations increased by 0.1 percentage point to 2.4%. Disagreement across respondents in their five-year-ahead inflation expectations was unchanged in December.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the short-term horizon and decreased at the medium-term horizon.
  • Median home price growth expectations increased by 0.3 percentage point to 1. 3%. The increase was driven by those in the South census region. Despite this increase, home price growth expectations remain subdued relative to their pre-pandemic levels.
  • Expectations about year-ahead price changes declined by 0.7 percentage point for both gas (to 4.1%) and food (to 7.6%) , and 0.2 percentage point for both college education (to 9.2%) and rent (to 9.6%). The median expected change in the cost of medical care, on the other hand, rose by 0.1 percentage point (to 9.7%) .

Labor Market

  • Median one-year-ahead expected earnings growth rose by 0.2 percentage point to 3.0% in December. The increase was most pronounced for respondents over the age of 60 and those with a high-school education or less.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.4 percentage points to 40.8%.
  • The mean perceived probability of losing one's job in the next 12 months increased by 0.9 percentage point to 12.6%, its highest reading since November 2021. Similarly, the mean probability of leaving one's job voluntarily in the next 12 months increased by 0.7 percentage point to 19.3%. Both increases were most pronounced for respondents over the age of 60.
  • The mean perceived probability of finding a job (if one's current job was lost) decreased to 57.5% from 58.2% in November.

Household Finance

  • The median expected growth in household income rose by 0.1 percentage point to 4.6% in December, a new series high .
  • Median household spending growth expectations fell sharply to 5.9% from 6.9% in November. The decline was broad based across age and income groups .
  • Perceptions of credit access compared to a year ago improved slightly in December, but the share of households reporting it is harder to obtain credit than one year ago remains near its series high. Similarly, expectations for future credit availability improved in December, with the share of respondents expecting it will be harder to obtain credit in the year ahead falling.
  • The average perceived probability of missing a minimum debt payment over the next three months fell by 0.4 percentage point to 11.4% .
  • The median expectation regarding a year-ahead change in taxes (at current income level) declined by 0.5 percentage point to 4.1%.
  • Median year-ahead expected growth in government debt was unchanged at 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 0.5 percentage point to 31.9%. The decrease was more pronounced for those with a college degree or higher.  
  • Perceptions about households' current financial situations compared to a year ago improved in December, with the share of households reporting a worse situation compared to a year ago declining. Similarly, year-ahead expectations about households' financial situations also improved in December.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.8 percentage point to 34.9%.

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 , the interactive chart guide , the survey questionnaire , and the FAQs .

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