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The Federal Reserve Bank of New York released its latest survey on consumer expectations on Monday. This found that Americans’ labor market expectations have fallen to the lowest levels since the Covid-19 pandemic.
Respondents’ expectations that unemployment rates would increase in one year increased from 4.6% points to 44% in March. This is the best reading since April 2020. It increased across age, education and income groups.
The chances of losing a job in the next 12 months increased by 1.6 percentage points to 15.7%. This is the highest level since March 2024. That increase was the biggest for respondents with annual household incomes under $50,000.
Respondents’ confidence level on their likelihood of finding a job if they lose their current job was reduced slightly to 0.1 percentage points to 51.1%.
Federal Reserve Chairman Powell says tariffs are likely to cause inflation and that could last
A New York Fed survey found that consumers are lowering their expectations for the job market. (Getty Images/Alison Joyce via Getty Images/Bloomberg)
Consumers also hope that inflation will rise over the next year, with the survey finding that inflation expectations have increased by 0.5 percentage points to 3.6% on the horizon a year later. Inflation expectations remained unchanged at 3% on the horizon in late 3 years, and fell slightly to 2.9% on the horizon in late 5 years, down just 0.1 percentage points.
The expected annual food price growth has increased by 0.1 percentage points to 5.2% since May 2024, to 5.2%. Medical expenses rose 0.7 percentage points to 7.9%, while rent increased 0.5 percentage points to 7.2%.
Annual price forecasts fell by 0.5 percentage points for gas, while university education costs fell by 3.2% and 0.2% points to 6.7%.
The fear of a recession, the rapid urge to see tariff uncertainty plunge into consumer sentiment
A New York Fed survey found that consumers expect food prices to rise by 5.2% over the next year. (Scott Olson/Getty Images/Getty Images)
Furthermore, the survey found that households find it more difficult to gain credit as March saw a slight increase in people who viewed their financial situation negatively. Household views on the possibility of stocks rising have also been immersed in the lowest levels since June 2022.
New York’s federal government report is set against an increase in economic uncertainty as president. Donald Trump It pursues a reset of US trade policy and has sparked a tough trade war with major trading partners such as China, Canada, Mexico and the European Union.
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Economists believe import taxes will cause pressure on inflation as import taxes increase. This is because businesses usually pass customs costs to consumers at higher prices.
Reuters contributed to this report.
