![Zombie Companies Walk Among Us](/content/images/size/w262h147/2024/09/martybent_a_group_of_zombies_walking_out_of_a_walgreens_in_rura_be9d2632-f358-4559-9155-11af599212bd.webp)
The NY Fed survey reveals Americans anticipate rising inflation and home prices, with growing concerns about job security and financial stability.
Americans are increasingly expecting higher inflation and home prices in the coming years, according to a recent survey conducted by the Federal Reserve Bank of New York. The data, released on Monday, indicates that consumers project inflation to be at 3.3% a year from now, which is up from the 3% anticipated in March. Over a three-year horizon, inflation expectations moderate slightly to 2.8%, up from the previous month's forecast of 2.9%. Looking five years ahead, the survey respondents see inflation at 2.8%, an increase from March’s projection of 2.6%.
The survey also revealed that respondents expect higher price pressures across various categories such as rent, food, gasoline, and medical costs over the next year. Notably, the anticipated rise in home prices reached its highest level since July 2022, with a 3.3% increase expected from the 3% that had been stable for the preceding seven months.
Despite expecting smaller future earnings and income gains, consumers project that their future spending will rise. The report found mixed sentiments regarding the job market, with the lowest level of respondents since April 2021 believing they could secure employment if they lost their current job. Households expressed more concern over their personal financial situations, although they were more optimistic about their access to credit.
In a related report, the Cleveland Fed indicated that business leaders' inflation expectations for the coming year have risen to 3.8%, up from the 3.4% gain projected in the first quarter.
Bloomberg also reported that consumers' near-term inflation outlook in April reached a five-month high, while anticipated home price growth surged to its peak since July 2022. The New York Fed's findings echo the University of Michigan's consumer survey, which showed a rise in year-ahead inflation expectations to a six-month high.
The survey's labor market findings were less positive, with expectations for earnings growth decreasing and the probability of higher unemployment increasing. Consumers' confidence in finding new employment if they lost their current job fell to the lowest level in three years. The financial strain on households is evident, with a rising number of consumers expecting to miss minimum debt payments over the next three months, reaching the highest level since COVID.