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August 8, 2025 - NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data on Thursday released the July 2025 Survey of Consumer Expectations, which shows that households’ inflation expectations increased at the short and longer-term horizons and were unchanged at the medium-term horizon. Consumers expect smaller growth in their tax payments and are more optimistic about their household financial situations. Expectations about the labor market were mixed with consumers reporting greater likelihoods of losing and finding jobs, and a lower likelihood of a rise in overall unemployment. The survey was fielded from July 1 through July 31, 2025.

The main findings from the July 2025 Survey are:

Inflation

• Median inflation expectations in July increased at the one-year-ahead horizon to 3.1% from 3.0% and at the five-year-ahead horizon to 2.9% from 2.6%. They remained steady at the three-year-ahead horizon at 3.0%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one-year horizon, was unchanged at the three-year horizon, and increased at the five-year horizon.
• Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one-year and three-year horizons and was unchanged at the five-year horizon.

• Median home price growth expectations remained unchanged at 3.0%. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
• Median year-ahead commodity price change expectations decreased by 0.3 percentage point for gas to 3.9%, 0.1 percentage point for the cost of medical care to 9.2%, 0.4 percentage point for the cost of college education to 8.7%, and 2.1 percentage points for rent to 7.0%. The year-ahead expected change in food prices was unchanged at 5.5%.

Labor Market

• Median one-year-ahead earnings growth expectations increased by 0.1 percentage point to 2.6% in July, remaining below the trailing 12-month average of 2.8%.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—dropped 2.3 percentage points to 37.4%, its lowest reading since January 2025.
• The mean perceived probability of losing one’s job in the next 12 months increased by 0.4 percentage point to 14.4%, above the trailing 12-month average of 13.9%. The mean probability of leaving one’s job voluntarily, or the expected quit rate, in the next 12 months increased by 0.2 percentage point to 19.0%.
• The mean perceived probability of finding a job in the next three months if one’s current job was lost increased by 1.1 percentage points to 50.7%, remaining below the trailing 12-month average of 51.8%. The increase was driven by those without a bachelor’s degree.

Household Finance

• The median expected growth in household income was unchanged at 2.9% in July, equaling the trailing 12-month average.

• Median nominal household spending growth expectations ticked up by 0.1 percentage point to 4.9%, equal to the trailing 12-month average.
• Perceptions of credit access compared to a year ago deteriorated slightly, with the net share of households reporting it is easier versus harder to get credit decreasing. Conversely, expectations for future credit availability improved, with the net share of respondents expecting it will be easier versus harder to obtain credit a year from now increasing slightly.
• The average perceived probability of missing a minimum debt payment over the next three months increased by 0.3 percentage point to 12.3%, remaining well below the trailing 12-month average of 13.6%.
• The median expectation regarding a year-ahead change in taxes at current income level declined by 0.6 percentage point to 2.9%, the lowest reading since October 2020.
• Median year-ahead expected growth in government debt increased by 1.8 percentage points to 9.1%, its highest reading since August 2024.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.1 percentage point to 23.6%, a new series’ low.
• Perceptions about households’ current financial situations compared to a year ago and expectations about year-ahead financial situations both improved. Smaller shares of respondents reported that their households are worse off than a year ago or are expecting to be worse off a year from now.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 2.3 percentage points to 38.3%, slightly above the trailing 12-month average of 38.1%.

 
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 1,200 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.
Source: Federal Reserve Bank of New York’s Center for Microeconomic Data