Compared to May, consumers’ median inflation expectations rose in June by 0.2 percentage points to 3.7% at the one-year horizon, rose by 0.2 percentage points to 3.3% at the three-year horizon, and remained unchanged at 3% at the five-year horizon, according to the June Survey.
The median inflation expectations at the one-year horizon were the highest since September 2023, while those at the three-year horizon were the highest since June 2022, per the survey.
“Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at all horizons,” the New York Fed said in a Tuesday (July 7) press release about the survey.
At the same time, consumers’ gas price growth expectations declined by 3.5 percentage points to 1.5%. Those expectations are at the lowest level since August 2022, according to the survey.
Asked about other commodities, consumers said that in the year ahead, they expect the prices of medical care and rent to increase, by 0.5 percentage points and 0.9 percentage points, respectively. They expect the cost of food and college education to decrease by 0.8 percentage points and 2.3 percentage points, respectively, per the release.
PYMNTS reported Friday (July 3) that the easing of gas prices had boosted consumer sentiment.
AAA said Thursday (July 2) that the national average of gas prices was $3.838, which was up from $3.172 a year earlier but down from $3.918 a week earlier and $4.290 a month earlier. This spring’s gas prices peaked at $4.56 on May 12.
The organization said in a press release that “the downward trend since late May is welcome news during the busy summer driving season.”
Both the University of Michigan’s Surveys of Consumers and The Conference Board found that consumer sentiment or consumer confidence improved in June as gas prices moderated.
The Conference Board also found that consumers’ average and median 12-month inflation expectations were less elevated in June than they were in May, due in part to falling gas prices.
