US Inflation Expectations Lowest in 6 Months

Median one-year-ahead inflation expectations in the US declined to 3.1% in January 2026, the lowest in six months, compared to 3.4% in December. Consumers expect a slowdown in prices for gas (-1.2 percentage points to 2.8%), medical care (-0.1 percentage point to 9.8%), rent (-0.9 percentage point to 6.8%) and home (-0.1 percentage point to 2.9%, its lowest reading since July 2023). Meanwhile, median year-ahead price change expectations were unchanged for food at 5.7% and increased by 0.7 percentage point for the cost of a college education to 9%. In addition, inflation expectations remained steady at 3% for both the three-year and five-year-ahead horizons. Elsewhere, earnings growth expectations increased by 0.2 percentage point to 2.7% and unemployment expectations edged up by 0.1 percentage point to 41.9%.

Median one-year-ahead inflation expectations in the US rose to 3.4% in December 2025, up from 3.2% in each of the previous two months, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. In contrast, three- and five-year inflation expectations were unchanged at 3.0%, suggesting stable longer-term inflation views. Inflation uncertainty increased across all horizons, indicating growing dispersion in expectations about future price outcomes. Meanwhile, median year-ahead price expectations declined across major household categories, including gas, food, medical care, college education, and rent. The survey also pointed to softening labor market sentiment, with job-finding expectations falling to a series low, the second such low in six months, while job-loss expectations worsened. Expectations for household income growth and spending, however, remained largely unchanged.

Median inflation expectations in the US held steady in November 2025, according to the Federal Reserve Bank of New York's Survey of Economic Expectations. The one-year-ahead median inflation expectation remained at 3.2%, while the three- and five-year-ahead horizons stayed at 3.0%. Median inflation uncertainty, reflecting the range of opinions on future inflation, was unchanged for the one- and three-year horizons and declined at the five-year horizon. Expectations for median home price growth remained unchanged at 3.0% for the sixth consecutive month. Year-ahead median expectations for commodity prices, however, showed notable increases: food rose 0.2 percentage points to 5.9%, gas climbed 0.6 points to 4.1%, medical care surged 0.7 points to 10.1% (the highest since January 2014), college education increased 0.2 points to 8.4%, and rent jumped 1.1 points to 8.3%.