Three-year-ahead median inflation expectations slipped by 0.1 percentage point to 3.2% in August, according to the Federal Reserve Bank of New York's Survey of Consumer Expectations, while broader labor-market anxiety surged to levels not seen since the early months of the pandemic.
The survey, fielded Aug. 3–31 among roughly 1,300 household heads, showed one-year-ahead inflation expectations holding steady at 3.6% and five-year-ahead expectations unchanged at 3.0%. Disagreement among respondents narrowed at the one-year horizon but widened at the three- and five-year horizons. Median inflation uncertainty rose at the one- and five-year ends, falling only at the three-year midpoint.
Home-price growth expectations dropped 0.2 percentage point to 3.0%, dipping below its 12-month trailing average of 3.1%, with the decline concentrated among respondents in the Northeast. Year-ahead price-growth expectations climbed across several categories: gasoline jumped 1.7 percentage points to 4.6%, rent rose 0.7 point to 6.6%, food increased 0.3 point to 5.3%, college education costs rose 0.3 point to 6.1%, and medical care climbed 0.2 point to 9.1%.
On the labor front, the mean probability that U.S. unemployment will be higher a year from now rose 1.6 percentage points to 44.4% — the highest reading since April 2020 — and was broadly elevated across age, education, and income groups. Earnings-growth expectations ticked up 0.1 point to 2.9%, remaining above its 12-month trailing average of 2.6%.
Other employment measures moved in mixed directions. The probability of losing one's job over the next 12 months fell 0.4 percentage point to 13.8%, its lowest level since February 2026. Expected quit rates rose 0.9 point to 19.5%, above the 12-month average of 18.4%. These offsets were concentrated among respondents with at most a high school degree and those earning less than $100,000 annually. Meanwhile, the probability of finding a new job if laid off decreased 0.8 point to 45.4%, just below its 12-month average of 45.5%.
Household-financial indicators generally worsened. Expected income growth held at 3.0%, while spending-growth expectations rose 0.3 point to 5.2%, above the 12-month average of 5.0%. Net shares reporting that credit was harder to obtain increased, and fewer respondents expected credit conditions to improve. The probability of missing a minimum debt payment within three months climbed 1.2 points to 13.2%, slightly above the 12-month average of 12.7%.
Median year-ahead tax-change expectations rose 0.5 point to 3.5%, the highest since December 2025, and expected government-debt growth increased 0.6 point to 9.7%, above the 12-month average of 8.8%. The share expecting savings-account rates to rise over the coming year ticked up 0.6 point to 28.8%, while the probability that stock prices would be higher in 12 months fell 0.5 point to 40.9%. Perceptions and expectations of household financial situations both deteriorated, with larger shares reporting or forecasting a worse outlook.
