Ahead of Wednesday's CPI report which is expected to show a substantial rise in consumer prices, moments ago we got an early look into how consumers view inflation after the NY Fed's latest monthly survey of consumer expectations reported that inflation expectations at the one-year horizon dipped to 3.46% in May from 3.64% in April, easing from the highest print since September 2023. Inflation expectations were unchanged at 3.1% for the three-year-ahead horizon and also unchanged at 3.0% at the five-year-ahead horizon in May.Median inflation uncertainty, or the uncertainty expressed regarding future inflation outcomes, increased at the one-year and three-year-ahead horizons and decreased at the five-year-ahead horizon. The drop in year-ahead expectations took place as 1-year gas inflation expectations extended its recent decline, sliding to 4.96% in May from 5.11% in April and from 9.42% in March, which had been the highest reading since March 2022.Among other prices, home price growth expectations increased to highest since July 2022.Food and rent price outlooks also increased while medical care and college eased (good luck).Turning to the labor market, sentiment continued to deteriorate with job-loss fears rising and probability of quitting at a three-year high despite unemployment rate seen edging lower and expected earnings growth steady.Respondents said the mean perceived probability of finding a job if one’s current job was lost decreased by 2.3% to 43.7%, remaining below its 12-month trailing average of 46.8% and marking the lowest reading since December 2025.The mean perceived probability of losing one’s job in the next twelve months increased by 0.5% to 15.1%, above the series’ 12-month trailing average of 14.4%. Despite that, the expected quit rate - the probability of leaving one’s job voluntarily in the next year, usually a sign of confidence in the labor market - rose in May to the highest since February of 2023. The increase was broad-based across age, education and income groups, the report said. The report followed an unexpectedly strong employment report for May with job gains beating expectations. For Fed officials, the report put to rest for now concerns that the US labor market remained fragile and stoked worries over inflation. Policymakers’ preferred measure of inflation hit 3.8% in April, amid a spike in energy prices.The New York Fed survey also reinforced other reports showing consumer sentiment is at record lows: the share of households who said their financial situation was worse than last year reached its highest level since January of 2023. More consumers also expected a deterioration in their finances in the year ahead.