Short-term inflation expectations of consumers in the USA have reached the highest level since May 2023

The New York Branch of the US Federal Reserve (Fed) published the results of the Consumer Expectations Survey for September.

According to the results of the survey conducted with the participation of approximately 1300 households, the median inflation expectation for the next year increased by 0.3 points compared to the previous month, reaching 3.9 percent in September.

Thus, short-term inflation expectation rose to its highest level since May 2023.

While consumers' medium-term inflation expectations increased by 0.1 points to 3.3 percent, long-term inflation expectations remained unchanged at 3 percent.

Consumers' price increase expectations for the next 12 months have also increased. The expectation for gasoline prices increased by 0.2 points to 4.8 percent, the expectation for food prices increased by 0.2 points to 5.5 percent, and the expectation for health services prices increased by 0.1 point to 9.2 percent.

The price increase expectation for university education costs increased by 1.4 points to 7.5 percent, and the expectation for rents increased by 0.2 points to 6.8 percent.

While expectations for income and spending growth have risen, households' assessments of their current and future financial situations have worsened.

The median expected increase in household income rose 0.1 percentage point to 3.1 percent, the highest level since February 2025.

The nominal household expenditure increase expectation for the next year also increased by 0.3 points to 5.5 percent. Thus, the expectation reached its highest level since May 2023.

Expectations regarding the labor market generally improved in September.

Consumer Price Index (CPI) in the USA increased by 0.4 percent on a monthly basis and 3.4 percent on an annual basis in August.

CPI data for September will be announced on October 14.