
NY Fed's Survey Of Consumer Expectations Shows Inflation Expectations Declined In May
American households' expectations about inflation declined across time horizons while pessimism about the labor market situation eased in May, according to the Survey of Consumer Expectations released by the Federal Reserve Bank of New York.
The survey showed that one-year-ahead inflation expectations fell by 0.4 percentage point to 3.2%, while three-year-ahead expectations dropped by 0.2 percentage point to 3.0%. At the same time, five-year-ahead expectations fell by 0.1 percentage point to 2.6%.
However, the year-ahead expected change in food prices rose by 0.4 percentage point to 5.5%, marking the highest level since October 2023.
Notably, the New York Fed survey is less volatile than other surveys, such as the University of Michigan and Conference Board measures, a CNBC report noted.
National Economic Council Director Kevin Hassett told CNBC that by every measure of inflation, it's lower than it's been in more than four years.“While the tariff revenue has been going up, inflation has been coming down, which is contrary to the story that everybody else has been saying, but very consistent with what we've been saying,” he said.
The survey showed that the mean perceived probability of losing one's job in the next 12 months reduced by 0.5 percentage point to 14.8%. At the same time, the mean probability that the U.S. unemployment rate will be higher one year from now fell 3.3 percentage points to 40.8%. However, this remains well above the trailing 12-month average of 37.7%.
Investors are now eyeing the release of the consumer inflation data later this week. On Monday, the U.S. benchmark indices traded in the green. The SPDR S & P 500 ETF Trust (SPY), which tracks the S & P 500, traded 0.08% higher on Friday morning, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq Composite, was up 0.21%.
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