The Federal Reserve Bank of New York released its September 2026 Survey of Consumer Expectations, showing higher short- and medium-term inflation expectations alongside mostly improved labor market expectations. Expected income and spending growth also increased, but households’ assessments of their current and future financial situations deteriorated. Median inflation expectations rose 0.3 percentage point to 3.9% at the one-year horizon, the highest since May 2023, and increased 0.1 percentage point to 3.3% at the three-year horizon. The five-year measure remained at 3.0%, while disagreement among respondents widened across all horizons. The perceived probability of job loss fell to 13.5%, its lowest since December 2024, and the probability of finding a new job rose to 46.1%. However, expected earnings growth declined to 2.6%. Expected household income growth increased to 3.1%, its highest since February 2025, while expected spending growth reached 5.5%, the highest since May 2023. Credit access was viewed as more difficult than a year earlier, although the perceived probability of missing a minimum debt payment fell to 12.2%. Larger shares of households reported worse financial circumstances than a year ago and expected further deterioration over the next year.
Federal Reserve Bank of New York finds one-year inflation expectations rose to 3.9%, highest since May 2023
The Federal Reserve Bank of New York found that one-year inflation expectations rose to 3.9% in September 2026, the highest since May 2023, while longer-term expectations held at 3.0%. Labor market expectations mostly improved and expected income and spending growth increased. Households nevertheless reported weaker current finances and a more pessimistic financial outlook.