New York Fed survey: Americans' confidence in employment prospects falls to a year-low, while inflation expectations remain stable.

The latest Consumer Expectations Survey released by the Federal Reserve Bank of New York on Monday shows that Americans' views on the job market became more cautious in May, with confidence in finding a job in the future dropping to the lowest level so far this year. However, consumer expectations for future inflation overall remained stable. The release of this survey comes just after the U.S. published a stronger-than-expected job report for May. The data shows that the U.S. added 172,000 nonfarm jobs in May, significantly higher than market expectations, indicating that the overall labor market remains resilient. For the Federal Reserve, the strong job data temporarily alleviates concerns about a weakening job market but also intensifies concerns about continuing inflationary pressures. The data shows that the Federal Reserve's most closely watched inflation indicator, the Personal Consumption Expenditures (PCE) Price Index, rose 3.8% year-on-year in April, marking the largest increase since 2023, with rising energy prices being one of the main driving factors. In this context, it is widely anticipated that the Federal Reserve will keep interest rates unchanged at the monetary policy meeting scheduled for June 16-17. This will also be the first monetary policy meeting chaired by the new Fed Chair, Kevin Walsh. The results of the job market survey indicate mixed signals from American consumers. The survey found that respondents believe the probability of being unemployed in the next 12 months has risen to 15.1%, an increase of 0.5 percentage points from April. At the same time, respondents believe the probability of finding a new job after losing their current job has decreased by 2.3 percentage points to 43.7%, marking the lowest level since December last year and the lowest reading so far this year. However, another indicator reflecting confidence in the labor market has shown improvement. The survey shows that the probability of American consumers voluntarily resigning in the next year reached the highest level since February 2023 in May. Generally, an increase in the willingness to quit voluntarily signifies that workers maintain some confidence in the job market and future income prospects. The New York Fed stated that this growth trend covers almost all age, education, and income groups. Regarding inflation, American consumers' expectations have not changed significantly. The survey found that respondents expect an inflation rate of 3.5% in the next year, slightly lower than the 3.6% in April; while the inflation expectations for the next three and five years remain at 3.1% and 3.0%, respectively, unchanged from the previous month. Despite stable inflation expectations, consumer sentiment continues to be under pressure. The New York Fed survey further confirms recent consumer confidence surveys, indicating that American consumer confidence is near historic lows. The sharp rise in gasoline prices in recent years and a series of aggressive tariff measures have continuously eroded household purchasing power and undermined consumer confidence. The data shows that the proportion of households believing that their financial situation has worsened compared to last year has reached the highest level since January 2023. Additionally, an increasing number of respondents expect their financial situation to further deteriorate in the next year. Furthermore, household debt pressures in the United States are also on the rise. The survey shows that the probability of consumers being unable to repay the lowest debt amount on time in the next three months continues to increase, with the pressure particularly evident among those with education levels below high school and annual incomes below $100,000.