New York Federal Reserve: Inflation expectations rise, unemployment concerns increase

Inflation Expectations - One-year inflation expectations increased by 0.2 percentage points to 3.4%, the highest since April 2025 [2] - Five-year inflation expectations also rose, up 0.1 percentage points to 3%, reaching the highest level since May 2024 [2] - Inflation expectations are increasing for essential goods and services, including food, gas, medical care, and rent [2] - The Fed is closely monitoring the five-year inflation outlook, concerned about the potential for a shift in long-term inflation expectations [7] Labor Market - Expectations for earnings growth decreased by 0.1 percentage points to 2.4%, marking the lowest level since May 2021 [3] - Expectations for higher unemployment increased by 2 percentage points to 41.1%, the highest since April 2025 [3] - Expectations for job loss increased by 0.4 percentage points to 14.9%, reaching the highest level since April 2025 [4] - Expectations for finding a job increased by 2.5 percentage points, rebounding from a series low [4] Spending and Monetary Policy - Spending growth expectations declined by 0.3 percentage points to 4.7% [5] - A Fed governor suggests the neutral rate may be higher than previously thought, influenced by supply-side policies [5]