US Inflation Expectations Fall to 7-Month Low

Median one-year-ahead inflation expectations in the US declined to 3% in February 2026, the lowest in seven months, compared to 3.1% in January. Consumers expect a slowdown in prices for food (-0.4 percentage point to 5.3%), medical care (-0.1 percentage point to 9.7%) and rent (-0.9 percentage point to 5.9%). On the other hand, median year-ahead price change expectations increased by 1.3 percentage points for gas to 4.1% and 0.1 percentage point for the cost of a college education to 9.1%. Inflation expectations remained steady at 3% for both the three-year and five-year-ahead horizons.

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.