The Federal Reserve Bank of New York’s Center for Microeconomic Data released the May 2025 Survey of Consumer Expectations, showing a decline in households’ inflation expectations at all horizons. Consumers’ recent pessimism about the labor market eased somewhat, while consumer debt delinquency expectations and household financial situation improvements were noted. Key findings include:
Inflation: Median inflation expectations decreased across all three horizons, with one-year-ahead expectations dropping 0.4 percentage point to 3.2%. The survey’s measure of disagreement also decreased at all three horizons.
Home prices: Median home price growth expectations decreased by 0.3 percentage point to 3.0%.
Commodity prices: Year-ahead expected changes in commodity prices, including gas and medical care costs, decreased or increased slightly.
Labor Market: Median one-year-ahead earnings growth expectations rose 0.2 percentage point to 2.7%, while mean unemployment expectations dropped 3.3 percentage points to 40.8%. The mean probability of finding a job if lost also increased by 1.5 percentage points.
Household Finance: The median expected growth in household income remained below the trailing 12-month average, while nominal spending growth expectations declined slightly. Expectations for future credit availability deteriorated, but perceptions of credit access improved.
Source: https://www.newyorkfed.org/newsevents/news/research/2025/20250609