Americans’ outlook for the labor market weakened in August even as their inflation expectations were largely unchanged, according to the New York Fed’s August Survey of Consumer Expectations.
The average probability that unemployment will increase over the next year climbed to 44.4%, its highest level since April 2020, while the perceived chance of finding a job within three months after losing one fell to 45.4%. Expectations for job losses improved somewhat, with the probability of losing a job declining to 13.8%.
Consumers also reported growing financial pressures. One-year household spending growth expectations increased to 5.2%, while perceptions of access to credit deteriorated and the expected probability of missing a minimum debt payment rose to 13.2%. Expectations for household finances worsened, with more respondents anticipating their financial situation would deteriorate over the next year.
Inflation expectations remained relatively contained, with one-year and five-year projections unchanged at 3.6% and 3%, respectively. Three-year expectations eased to 3.2%.
The survey was released ahead of the August PPI and CPI reports and the Fed’s Sept. 15-16 meeting, following five consecutive meetings at which officials kept rates steady.
