February 2019 Consumer Expectations: Inflation Expectations Edge Down After Holding Steady For Ten Months

from the New York Fed

The February 2019 Survey of Consumer Expectations, which shows a decline in the short- and medium-term inflation expectations. Medical care price growth expectations declined to a series low. Expectations about the U.S. unemployment rate improved, while job finding and job loss expectations remained stable.

The main findings from the February 2019 Survey are:


  • Median inflation expectations at both the one-year and three-year horizons declined by 0.2 percentage points to 2.8% in February, after having remained essentially unchanged since April 2018. Inflation uncertainty—or the uncertainty expressed by respondents regarding future inflation outcomes—also declined slightly at both the one- and three-year horizons.
  • Median home price change expectations remained steady at 3.0% for the third consecutive month. This was the lowest reading of the series.
  • The median one-year ahead expected changes in the cost of medical care declined from 8.3% in January to 7.5% in February. This is the lowest reading of the series since its inception in June 2013.
  • In contrast, the median one-year ahead expected price change for gas, college education, and rent changed little in February, staying within 0.1 percentage points of the previous month's expectations.

Labor Market

  • Median one-year ahead earnings growth expectations increased marginally from 2.4% in January to 2.5% in February, returning to its December 2018 reading.
  • Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—declined from 40.6% in January to 37.2% in February, but remains above its 12-month trailing average of 35.3%. The decline was broad-based across age, education, and income groups.
  • The mean perceived probability of losing one's job in the next 12 months increased slightly from 14.5% in January to 14.6% in February. On the other hand, the mean probability of leaving one's job voluntarily in the next 12 months decreased from 21.4% in January to 21.2%.
  • The mean perceived probability of finding a job (if one's current job was lost) remained stable at 59.2% in February, just 0.9% below the series high of 60.1% reached in November 2017.
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