Federal Reserve Bank of New York survey shows lower one year inflation expectations and weaker labor market and household finance outlooks

The Federal Reserve Bank of New York released the May 2026 Survey of Consumer Expectations, showing households lowered their one-year-ahead inflation expectation to 3.5% while leaving the three-year and five-year measures unchanged at 3.1% and 3.0%. The survey also pointed to a weaker outlook beyond inflation, with higher home price growth expectations but deterioration in labor market sentiment, expected future credit access, views of household finances, and expected debt delinquency. Median home price growth expectations rose 0.5 percentage point to 3.5%, the highest reading since July 2022, while disagreement about inflation fell across all horizons and inflation uncertainty increased at the one-year and three-year horizons. In labor market responses, the perceived probability of losing a job over the next 12 months increased to 15.1% and the probability of finding a job after losing one fell to 43.7%, the lowest since December 2025, even as the mean probability that the U.S. unemployment rate will be higher in a year edged down to 43.2%. On household finances, expected spending growth fell to 5.0% and respondents became more pessimistic about future credit availability. The perceived probability of missing a minimum debt payment in the next three months rose to 12.6%, and the net share expecting a better rather than worse financial situation in one year fell to its lowest level since October 2022. The survey was fielded from May 1 through May 31, 2026.