US inflation expectations rise for short & long-term horizons

The median inflation expectations rose to 3.3 per cent from 3.0 per cent at the one-year horizon, still below its 12-month trailing average of 3.5 per cent. Conversely, inflation expectations at the three-year horizon slightly decreased to 2.8 per cent from 2.9 per cent, while expectations at the five-year horizon increased to 2.8 per cent from 2.6 per cent. Disagreement among respondents about inflation expectations decreased at the one-year horizon but increased at the three- and five-year horizons. Additionally, median inflation uncertainty increased at the one- and five-year horizons, while it declined at the three-year horizon.

Labour market expectations showed varied trends. The median one-year-ahead expected earnings growth decreased by 0.1 percentage point to 2.7 per cent, primarily driven by respondents with a high school degree or less. Despite the decline, this level remains above the pre-pandemic range of 2.0 per cent-2.2 per cent. Mean unemployment expectations, or the probability that the US unemployment rate will be higher in a year, rose by 1 percentage point to 37.2 per cent, still below its 12-month trailing average of 38.2 per cent.

The mean perceived probability of losing one’s job in the next 12 months fell by 0.6 percentage point to 15.1 per cent. Additionally, the mean probability of leaving one’s job voluntarily in the next 12 months decreased by 1.2 percentage points to 19.4 per cent. However, the mean perceived probability of finding a job if one’s current job was lost declined for the fourth consecutive month, dropping to 50.9 per cent from 51.2 per cent in March. This marks the lowest reading in the series since April 2021.

The survey also noted an increase in spending growth expectations, indicating consumers anticipate higher expenditures in the near future.

Fibre2Fashion News Desk (DP)