(The Center Square) – Americans are more pessimistic about coming inflation than ever recorded, new survey data shows.
The New York Federal Reserve released the June 2022 Survey of Consumer Expectations on Monday, reporting record-high expectations about the future inflation rate.
The survey comes as the Fed has decided to adopt an aggressive monetary policy in an attempt to curb the highest inflation rate seen in 40 years.
According to the survey, the median consumer expectations for the future inflation rate a year from now have increased from 6.6% in May to 6.8%, the highest ever. However, consumers think inflation will finally decrease three years from now, with the median inflation expectations decreasing from 3.9% to 3.6%.
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“The increase in short-term expectations was driven by respondents over age 60 and respondents with at least some college education,” The Federal Reserve said. “The decline in medium-term expectations was broad-based across education and income groups.”
Consumers’ expected price changes one year from now increased by 0.1% for gas to 5.6%, rent to 10.3%, medical care to 9.5%, and college education to 8.7%.
Expectations for future home prices one year from now, however, have decreased dramatically. According to the survey, consumers’ median expected change in home prices one year from now has dropped to 4.4% from 5.8%, the lowest reading since February 2021.
According to the survey, the median consumer uncertainty on inflation rates for next year increased to 4.7% from 4.3% in May, reaching an all-time high.
Alongside consumers’ worries about future inflation, consumers also tend to believe that the U.S. unemployment rate will increase next year. The survey reports consumers’ expectations that the mean probability of the U.S. unemployment rate rising in a year increased by 1.8 percentage points to 40.4%, the highest rate since April 2020.
Consumers also expect it to be harder to find a job in the next three months if they lose their current position, with mean expectations of finding a job declining to 56.8% from 58.2%.
The survey also reports that households throughout the U.S. are in a worse position financially now than they were a year ago and are more pessimistic about their future financial situation.