US consumer inflation expectations hit highest since May 2023

US consumers' year-ahead inflation expectations rose in September to their highest level since May 2023, the Federal Reserve Bank of New York said Wednesday.

Median one-year inflation expectations increased to 3.9% from 3.6% in August, while three-year expectations edged up to 3.3% from 3.2%, the bank said.

Five-year inflation expectations remained unchanged at 3%, it added.

Expected household spending growth climbed 0.3 percentage points to 5.5%, also its highest level since May 2023, according to the bank.

Consumers expected prices over the coming year to rise 4.8% for gasoline, 5.5% for food and 6.8% for rent, the bank said.

Expected growth in college education costs rose to 7.5%, it added.

Households reported worsening financial situations and greater difficulty accessing credit compared with a year earlier, according to the bank.

Labor market expectations mostly improved, however.

The perceived probability of losing a job fell to 13.5%, its lowest level since December 2024, while the likelihood of finding a new job after losing one increased to 46.1%, the bank said.