The key facts

  • Median inflation expectations: 3.9% at one year, 3.3% at three years, 3.0% at five years — unchanged
  • Probability of higher unemployment in a year — 45.3%, highest since April 2020
  • Expected rent growth rose by 0.9 percentage points to 7.7%

Inflation expectations stable, labor market sentiment mixed

US consumer inflation expectations remained unchanged in October across all three time horizons, while assessments of the labor market situation were mixed, the Federal Reserve Bank of New York reported on Monday based on the October Survey of Consumer Expectations. The survey covers about 1,300 household heads.

Prices: what changed and what didn't

Median inflation expectations stood at 3.9% one year ahead, 3.3% at three years, and 3.0% at five years — all three figures unchanged. Home price expectations also remained at 3.0%. However, forecasts diverged across individual categories: expected gasoline price growth over the next 12 months fell by 0.6 percentage points to 4.2%, while the food figure held at 5.5%. But for other major spending categories, consumers expect sharper price increases: expected medical care cost growth rose by 0.1 percentage points to 9.3%, college costs to 7.6%, and expected rent growth climbed by 0.9 percentage points to 7.7%. Expected household income growth fell by 0.1 percentage points to 3.0%, while spending growth declined by 0.2 percentage points to 5.3%.

Labor market: concerns rising, but so is confidence in finding a job

Labor market sentiment proved contradictory. The average perceived probability that the unemployment rate will be higher a year from now rose by 1.4 percentage points to 45.3% — the highest reading since April 2020. The probability of losing a job within a year increased by 0.4 percentage points to 13.9%. At the same time, however, confidence in finding a new job if the current one is lost also grew: this indicator also added 0.4 percentage points, reaching 46.5% — a high since November 2025. Thus, consumers are simultaneously more afraid of unemployment and rate their chances of finding employment better.

Context of official statistics

According to the survey, US consumer prices rose 0.6% month-over-month and 3.7% year-over-year in September. October inflation data are due to be published on Tuesday, which will allow a comparison of actual price dynamics with household expectations.