US short-term inflation expectations rise in March: New York Fed

Short-term inflation expectations for US consumers increased in March, while households grew more pessimistic about their financial situations, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations released Tuesday.

The New York Fed said median inflation expectations rose 0.4 percentage points to 3.4% for the year-ahead horizon.

Median expectations also increased 0.1 percentage points to 3.1% at the three-year-ahead horizon, while remaining unchanged at 3% for the five-year-ahead horizon.

Among commodity prices, year-ahead gasoline price growth expectations jumped 5.3 percentage points to 9.4% in March, marking the highest reading since March 2022.

Labor market expectations were mixed in the survey. The mean perceived probability of finding a job if one’s current job was lost rose 1.9 percentage points to 45.9%, but the mean perceived probability of losing one’s job in the next 12 months also edged up 0.6 percentage points to 14.4%.

The survey also showed that perceptions of current household finances deteriorated from a year earlier, with more respondents reporting worse financial conditions and fewer saying their situation had improved.

Expectations for household finances in the coming year also weakened, with the share of households expecting a worse financial situation reaching its highest since last April.