Mon, 09 November 2020 | inflation financial situation
The Federal Reserve Bank of New York's Center for Microeconomic Data released the October 2020 Survey of Consumer Expectations, which shows a decline in income and spending growth expectations. Changes in labor market expectations were mixed showing declines in both average job loss and job finding expectations. Median inflation expectations declined at the short-term horizon, while remaining unchanged at the medium-term horizon. Uncertainty and disagreement about future inflation decreased slightly but remained at an elevated level.
The main findings from the October 2020 Survey are:
Median inflation expectations in October decreased from 3.0% to 2.8% at the one-year horizon and remained unchanged at 2.7% at the three-year horizon. The decline was driven by higher-income respondents (household income above $100,000). Our measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) was unchanged at the one-year horizon but declined at the three-year horizon. Both remain substantially above their pre-COVID-19 levels.
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Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at both horizons but remains elevated relative to pre-COVID-19 readings.
Median home price change expectations, which have been trending upward after reaching a series' low of 0% in April 2020, were unchanged at 3.1% in October.
The median one-year ahead expected change in the cost of a college education declined from 5.2% to 4.9% in October. Median expectations for the cost of rent and medical care both increased from 5.4% and 6.8% to 5.7% and 9.1% in October, respectively.