Consumers See Stable Inflation as Job Outlook Improves
Survey Shows Rising Confidence Despite Household Financial Strains
Key Takeaways:
- A New York Fed survey showed expected inflation held at 3.2% for the year ahead in Nov. while the perceived chance of job loss fell to 13.8%.
- The data signaled improving labor market sentiment even as 39% of households said their finances worsened from a year earlier, the highest share in two years.
- The readings come as Fed officials prepare for a Dec. 10 rate decision and monitor whether tariffs could keep inflation pressures elevated.
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U.S. consumer inflation expectations were stable in November while perceptions about job prospects improved, according to a survey from the Federal Reserve Bank of New York.
Expected inflation a year ahead was little changed at 3.2% last month, while expected inflation three and five years ahead remained at 3%, according to median responses in the New York Fed’s monthly Survey of Consumer Expectations, published Dec. 8. The perceived probability of losing one’s job fell to 13.8%, marking the lowest reading this year.
Fed officials are widely expected to cut their benchmark interest rate for a third straight time Dec. 10 at the conclusion of a two-day policy meeting, in a bid to safeguard against worsening labor market conditions. Still, several officials have also voiced concerns that tariffs could result in long-lasting price increases, and are closely following estimates of expected inflation.
The New York Fed survey showed consumers largely were more optimistic about the labor market in November than a month earlier, marking down the chances of a higher unemployment rate a year from now and reporting better odds of finding a job if they were to lose theirs.
But with job prospects still worse than last year and inflation still elevated, a greater share of households also reported deterioration in their personal finances. The percentage of respondents saying their current financial situation was worse than a year ago rose to 39%, the highest in two years.
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