from the New York Fed

The Federal Reserve Bank of New York’s Center for Microeconomic Data released the March 2018 Survey of Consumer Expectations, which shows no change in short- and medium-term inflation expectations. Consumers were less optimistic about labor market outcomes.

In particular, expectations about income growth, the U.S unemployment rate, and the probability of losing one’s job all deteriorated slightly in March.

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The main findings from the March 2018 Survey are:


  • Median inflation expectations at both the one-year and three-year horizons remained unchanged in March at 2.8% and 2.9%, respectively.
  • Median inflation uncertainty—or the uncertainty expressed by respondents regarding future inflation outcomes—increased slightly at both horizons from last month series’ lows.
  • Median home price change expectations increased 0.2 percentage points to 3.5% in March, remaining above its 2017 average of 3.2%. Most of the increase was driven by respondents from the South and Northeast.
  • Commodities price expectations changed relatively little in March. The median one-year ahead expected gasoline price change increased 0.3 percentage points to 4.6%, while the median expected change in food prices increased 0.2 percentage points to 4.5%.
  • Expectations for a change in the cost of college education and medical care declined for the fourth month in a row from 8.0% and 9.7% last November, to 5.9% and 8.8% in March, respectively.
  • Labor Market

  • Median one-year ahead earnings growth expectations declined slightly, from 2.7% in February to 2.6% in March. The decline was driven by respondents with annual income below $50,000.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—increased 2.1 percentage points to 34.4% in March, but remains below its 2017 average of 35.7%.
  • The mean perceived probability of losing one’s job in the next 12 months increased from 12.8% to 13.9%, while the mean probability of leaving one’s job voluntarily in the next 12 months declined from 21.4% to 19.3%, its lowest level since July 2013.
  • The mean perceived probability of finding a job (if one’s current job was lost) dropped from 59.7% in February to 57.6% in March, slipping below its 2017 average of 58.0%.
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