Short-term inflation expectations jumped in the latest NY Fed Survey of Consumer Expectations in March.

• The median 1-year ahead inflation expectations jumped 0.5 ppts to 3.6%, the highest since October 2023.
• There was no increase in longer-term inflation expectations: median 3-year ahead unchanged at 3.0% and median 5-year ahead actually fell -0.1 ppts to 2.9%.

• Mean unemployment expectations (or the mean probability that the U.S. unemployment rate will be higher one year from now) jumped by 4.6 ppts to 44.0% in March, the highest reading since April 2020.

• The mean perceived probability of losing one’s job in the next year increased by 1.6 ppts to 15.7%, the highest level since March 2024. The increase was largest for respondents with annual household incomes below $50,000.
• Consumers’ year-ahead expectations about their households’ financial situations deteriorated in March, with the share of households expecting a worse financial situation one year from now rising to 30%, the highest level since October 2023.
• Households saw slightly weaker income growth and spending growth in the next year, but no major change was seen in March.
• Additionally, the mean probability of not making a minimum debt payment fell -1.0 ppt to 13.6% despite households expecting weaker finances.