Short- and Medium-Term Inflation Expectations Increase; Labor Market Expectations Improve

NEW YORK-The Federal Reserve Bank of New York's Center for Microeconomic Data today released the September 2026Survey of Consumer Expectations, which shows that households' inflation expectations increased at the short- and medium-term horizons and remained unchanged at the longer-term horizon. Labor market expectations mostly improved with unemployment rate, job finding, job loss, and quit expectations all improving. Income and spending growth expectations both increased, while perceptions and expectations about households' future financial situation deteriorated. The survey was fielded from September 1 through September 30, 2026.

The main findings from the September 2026Survey are:

Inflation

• Median inflation expectations increased by 0.3 percentage point to 3.9% at the one-year-ahead horizon and by 0.1 percentage point to 3.3% at the three-year-ahead horizon. Median inflation expectations were unchanged at the five-year-ahead horizon at 3.0%. This is the highest reading for the one-year-ahead inflation expectations since May 2023. The survey's measure of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased at all horizons.
• Median inflation uncertainty-or the uncertainty expressed regarding future inflation outcomes-increased at the one- and three-year horizons and decreased at the five-year horizon.
• Median home price growth expectations remained unchanged at 3.0%, just below the 12-month trailing average of 3.1%.
• Among commodities, median year-ahead expected price changes increased by 0.2 percentage point to 4.8% for gas, by 0.2 percentage point to 5.5% for food, and by 0.1 percentage point to 9.2% for medical care. Median year-ahead expected price changes increased by 1.4 percentage points to 7.5% for the cost of a college education and by 0.2 percentage point to 6.8% for rent.

Labor Market

• Median one-year-ahead earnings growth expectations declined by 0.3 percentage point to 2.6% in September, equaling its 12-month trailing average.
• Mean unemployment expectations-or the mean probability that the U.S. unemployment rate will be higher one year from now-decreased by 0.5 percentage point to 43.9%, remaining above its 12-month trailing average of 42.4%.
• The mean perceived probability of losing one's job in the next 12 months decreased by 0.3 percentage point to 13.5%, its lowest reading since December 2024. The mean probability of leaving one's job voluntarily, or the expected quit rate, in the next 12 months increased by 0.4 percentage point to 19.9%, remaining above the series' 12-month trailing average of 18.5%. The decrease in job loss expectations was driven by those between ages 40 to 60 and those with annual household incomes over $100,000. The increase in quit expectations was driven by those without a Bachelor's degree and those above age 40.
• The mean perceived probability of finding a job if one's current job was lost increased by 0.7 percentage point to 46.1%, above its 12-month trailing average of 45.5%.

Household Finance

• The median expected growth in household income increased by 0.1 percentage point to 3.1%, its highest reading since February 2025.
• Median one-year-ahead nominal household spending growth expectations increased by 0.3 percentage point to 5.5%, above its 12-month trailing average of 5.0%. This is the highest reading of the series since May 2023. The increase was broad-based across age and education groups.
• Perceptions of credit access compared to a year ago declined, with the net share of households reporting it is harder to get credit increasing. Expectations for future credit availability remained essentially unchanged.
• The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.0 percentage point to 12.2%, falling below its 12-month trailing average of 12.7%.
• The median expectation regarding a year-ahead change in taxes at current income level increased by 0.2 percentage point to 3.7%, its highest reading since December 2025.
• Median year-ahead expected growth in government debt increased by 0.2 percentage point to 9.9%, remaining above its 12-month trailing average of 9.1%.
• The mean perceived probability that the average interest rate on savings accounts will be higher in 12 months increased by 1.5 percentage points to 30.3%, its highest reading since October 2023.
• Perceptions and expectations about households' financial situations both deteriorated with larger shares of households reporting a worse financial situation compared to a year ago and expecting a worse financial situation a year from now, and smaller shares of households reporting or expecting a better financial situation.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.7 percentage point to 40.2%.

About the Survey of Consumer Expectations (SCE)

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans' views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers' outlooks. Expectations are also available by age, geography, income, education, and numeracy.

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here, the FAQs, the interactive chart guide, and the survey questionnaire.