New York Fed survey: US consumers expect short-term inflation to rise, confidence in labor market declines.

According to the March Consumer Expectations Survey released by the New York Fed on Monday, short-term inflation expectations among American consumers have increased, while long-term inflation expectations have slightly eased. However, consumers in general have become more pessimistic about the overall U.S. economy and their own financial situation. The survey was conducted before former President Trump announced his "Liberation Day" tariff policy on April 2, and the results showed a decrease in consumer confidence across various economic dimensions, including employment, income, and inflation. The data shows that consumers' median expectation for inflation in the next year has increased by 0.5 percentage points to 3.6%; the three-year inflation expectation remains unchanged at 3.0%; and the five-year inflation expectation has decreased by 0.1 percentage points to 2.9%. Specifically, consumers' expectations for food price growth have increased by 0.1 percentage point to 5.2%, the highest level since May 2024; expectations for medical expense growth have increased significantly by 0.7 percentage points to 7.9%; rental growth expectations have also increased by 0.5 percentage points to 7.2%. However, expectations for housing prices have decreased, with the median expectation declining by 0.3 percentage points to 3.0%. In the labor market, consumers' expectations for wage growth in the next year have decreased by 0.2 percentage points to 2.8%, remaining flat with the average of the past 12 months. At the same time, the probability (mean) that consumers believe the U.S. unemployment rate will increase in the next year has jumped by 4.6 percentage points to 44.0%, the highest level since the early days of the COVID-19 pandemic in April 2020. Concerns about unemployment have also intensified. Consumers' perception of the probability of losing their jobs in the next 12 months has increased by 1.6 percentage points to 15.7%, reaching a new high since March 2024. In March, consumers' median expectation for household income growth decreased by 0.3 percentage points to 2.8%, below the average level of the past year (3.0%). Meanwhile, expectations for household expenditure growth have also slightly decreased by 0.1 percentage point to 4.9%. In terms of credit access, both current credit conditions and future credit availability expectations among consumers have declined. Affected by inflationary pressures and job uncertainty, consumers' confidence in their future financial situation has further deteriorated. The percentage of respondents who believe their family's financial situation will be worse in a year has risen to 30.0%, the highest level since October 2023.