NY Fed Survey Shows Surge in Longer-Term Inflation Expectations
A month after the NY Fed Consumer Survey showed a decrease in inflation expectations for the next three to five years, there has been a turnaround. The February report reveals that longer-term inflation outlooks have increased significantly.
While shorter-term expectations remained steady, expectations for inflation over three to five years surged. This shift was particularly notable among respondents with less education. The survey also noted less disagreement among respondents about future inflation, but uncertainty remained for longer-term projections.
Regarding price expectations, there were fluctuations across various goods and services. Notably, gas prices were expected to rise slightly, while medical care costs were anticipated to decrease.
Surprisingly, rent expectations declined despite increasing rents nationally. In the labor market, there was increased anticipation of both voluntary and involuntary job separations, but prospects for finding new jobs decreased slightly.
Household finance expectations saw mixed changes, with steady income growth but increased spending expectations. There was also a rise in expectations for government debt growth.
Despite the uptick in long-term inflation expectations, more respondents anticipated higher stock prices in a year, indicating a potential disconnect between expectations and market realities.
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