US inflation expectations ease in May; job security improves

Expectations for the three-year and five-year horizons also declined, falling by 0.2 pp to 3.0 per cent and by 0.1 pp to 2.6 per cent, respectively, New York Fed said in a release.

The survey’s measure of disagreement in inflation expectations—defined as the difference between the 75th and 25th percentiles—also decreased across all three horizons. The decline in one- and three-year inflation expectations was broad-based across age, education, and income groups.

Median inflation uncertainty declined at the one-year horizon but remained unchanged at the three- and five-year horizons.

Expectations for year-ahead changes in commodity prices also declined. 

On the labour front, sentiment showed signs of improvement. Median expectations for one-year-ahead earnings growth increased by 0.2 pp to 2.7 per cent. At the same time, mean unemployment expectations—defined as the probability that the US unemployment rate will be higher one year from now—fell sharply by 3.3 pp to 40.8 per cent. Despite the decline, this figure remains above the trailing twelve-month average of 37.7 per cent.

The mean perceived probability of losing one’s job within the next twelve months decreased slightly by 0.5 pp to 14.8 per cent. Conversely, the mean probability of voluntarily leaving one’s job rose marginally by 0.1 pp to 18.3 per cent.

The mean perceived probability of finding a new job within three months if one lost their current job increased by 1.5 pp to 50.7 per cent, though this remains below the trailing twelve-month average of 52.2 per cent. This increase was driven primarily by individuals without a bachelor’s degree and those with household incomes below $100,000.

Fibre2Fashion News Desk (HU)