US Consumer Inflation Expectations Ease in May

Median US inflation expectations for the year ahead were steady at 3.9% in October 2026, the same as in September, and holding at 2023-highs, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. Median year-ahead expected price changes decreased by 0.6 pp to 4.2% for gas and were unchanged at 5.5% for food. In contrast, price changes increased by 0.1 pp to 9.3% for the cost of medical care, by 0.1 pp to 7.6% for the cost of college education, and by 0.9 pp to 7.7% for rent. Median home price growth expectations were unchanged at 3%, just below its 12-month trailing average of 3.1%. Meanwhile, expectations for the three-year and five-year horizons were also steady at 3.3% and 3% respectively. Elsewhere, earnings growth expectations remained unchanged at 2.6%, unemployment expectations rose by 1.4 pp to 45.3%, its highest reading since April 2020 and expected growth in household income declined by 0.1 pp to 3%.

Median US inflation expectations for the year ahead rose 0.3 percentage point to 3.9% in September 2026, the highest level since May 2023, according to the latest Survey of Consumer Expectations. Year-ahead price expectations increased across several key categories. Gasoline expectations rose 1.7 percentage points to 4.6%, food to 5.3%, and medical care to 9.1%. Expectations for college tuition increased to 6.1%, while rent rose to 6.6%. At the three-year horizon, inflation expectations edged up 0.1 percentage point to 3.3%, while five-year expectations were unchanged at 3.0%.

US consumers’ median one-year inflation expectations were unchanged at 3.6% in August 2026, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations. However, expected price growth for gas rose 1.7 percentage points to 4.6%, while food expectations increased 0.3 percentage point to 5.3%. Medical-care price expectations rose 0.2 percentage point to 9.1%. Expectations for college education costs increased 0.3 percentage point to 6.1%, while rent expectations climbed 0.7 percentage point to 6.6%. Meanwhile, the five-year-ahead measure was unchanged at 3%, while three-year-ahead expectations edged down 0.1 percentage point to 3.2%. Elsewhere, median expectations for one-year-ahead earnings growth increased slightly to 2.9%. Concerns about the labour market also intensified, with the mean probability that unemployment will be higher in a year rising 1.6 percentage points to 44.4%, the highest level since April 2020.