Median one- and five-year-ahead inflation expectations were unchanged in July at 3 per cent and 2.8 per cent respectively.

Conversely, median three-year-ahead inflation expectations declined sharply by 0.6 percentage point to 2.3 per cent, hitting a series low since the survey’s inception in June 2013.

The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one- and five-year-ahead horizons and was unchanged at the three-year-ahead horizon. 

Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at all three horizons.

Labour market expectations were mixed, with respondents expecting lower earnings growth and a lower likelihood of finding a new job within three months if they were laid off, the centre said in a release.

Delinquency expectations continued their upward trend in July and have risen to the highest level since April 2020.

Median one-year-ahead expected earnings growth declined by 0.3 percentage point to 2.7 per cent in July. The series has been moving within a narrow range of 2.7-3 per cent since January 2024.

Mean unemployment expectations—or the mean probability that the US unemployment rate will be higher one year from now—decreased by 1 percentage point to 36.6 per cent, remaining below its 12-month trailing average of 37.7 per cent.

The mean perceived probability of losing one’s job in the next 12 months decreased by 0.5 percentage point to 14.3 per cent. The mean probability of leaving one’s job voluntarily in the next 12 months increased by 0.2 percentage point to 20.7 per cent, the measure’s highest reading since February 2023.

The mean perceived probability of finding a job (if one’s current job was lost) decreased by 0.9 percentage point to 52.5 per cent.

Median home price growth expectations were unchanged at 3 per cent in July.

The median expected growth in household income was unchanged at 3 per cent in July. This series has been moving in a narrow band between 2.9 per cent and 3.3 per cent since January 2023.

Median household spending growth expectations fell by 0.2 percentage point to 4.9 per cent, the measure’s lowest reading since April 2021.

Fibre2Fashion News Desk (DS)