U.S. Consumers Expect Higher Inflation in Coming Years, Says New York Fed
U.S. consumers are anticipating higher levels of inflation in the coming years, despite expressing optimism about their personal financial situations improving significantly, according to the New York Federal Reserve’s consumer expectations survey for November.
The survey found that respondents expect inflation a year from now to be 3%, up from 2.9% in October, and 2.6% three years from now, up from 2.5%. Inflation five years from now is expected to be 2.9%, up from 2.8% in October.
The survey also showed that households with a college degree have a more optimistic view of future inflation, while those without a college degree have a less optimistic view.
The survey also found that respondents expect gasoline prices, rent, and food costs to rise at a slower rate a year from now, while medical care and college costs are expected to rise more rapidly. Home prices are expected to rise at a steady 3%.
The survey was released at a time when the economy is undergoing significant changes with the incoming presidency of Donald Trump, who is expected to pursue policies that may increase price pressures and push up deficits.
The survey also found that households are optimistic about their future financial situations, with those expecting to be better off jumping to the highest level since February 2020. The share of those expecting to be worse off has decreased, and households are also less likely to miss debt payments.
