- Prior month one year inflation expectations 3.0%
- one year and three year inflation expectations remain unchanged at 3.0%
- five year inflation expectations 3% up from 2.7% prior month
- January saw larger expected rise for food, gas, rent, college, medical prices.
- January expected spending levels decline to lowest level since January 2021.
- Labor market expectations were mixed
- Perceptions of access to credit improved in January.
- Household lower perception of financial situation in January
Inflation Expectations:
- Unchanged at 3.0% for the 1-year and 3-year horizons.
- Increased to 3.0% (+0.3 ppt) for the 5-year horizon.
Commodity Price Expectations (Year-Ahead):
- Gas: +2.6% (+0.6 ppt).
- Food: +4.6% (+0.6 ppt).
- Medical care: +6.8% (+1.0 ppt).
- College costs: +5.9% (+0.2 ppt).
- Rent: +6.0% (+0.5 ppt).
Job Market Expectations:
- Probability of losing one’s job: Increased to 14.2% (+2.3 ppt).
- Probability of finding a job within 3 months: Increased to 51.5% (+1.3 ppt).
Household Spending Expectations:
- Declined to 4.4% (-0.4 ppt), the lowest since January 2021.
More Details on Prices:
- Median home price growth expectations rose by 0.1 percentage point to 3.2%. This increase was driven by respondents in the West census region. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
- Year-ahead commodity price expectations rose across the board, increasing by 0.6 percentage point for the price of gas to 2.6%, 0.6 percentage point for the price of food to 4.6%, 1.0 percentage point for the cost of medical care to 6.8%, 0.2 percentage point for the cost of college to 5.9%, and 0.5 percentage point for rent to 6.0%.
More details on Employment
- Median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 3.0% in January. This series has been moving within a narrow range between 2.7% and 3.0% since January 2024.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 0.6 percentage point to 34.0%, the measure’s lowest reading since July 2021. The decline was driven by respondents with no college degree, those with an annual income below $100,000, and those above age 40.
More details on Household
- The average perceived probability of missing a minimum debt payment over the next three months decreased by 0.9 percentage point to 13.3%. This series remains above its 12-month trailing average of 13.0%.
- The median expected year-ahead change in taxes at current income level increased by 0.2 percentage point to 3.2%, but remains well below its 12-month trailing average of 3.9%.
- Median year-ahead expected growth in government debt increased by 0.1 percentage point to 6.0%. This reading is well below the series 12-month trailing average of 8.6%.
- The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.2 percentage point to 25.0%.
- Perceptions about households’ current financial situations compared to a year ago deteriorated in January, with the net share of households reporting a worse versus better situation compared to a year ago rising. Similarly, year-ahead expectations about households’ financial situations also deteriorated in January.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.5 percentage point to 40.3%.
