US Consumers Grow Pessimistic as Inflation Outlook Remains Steady

U.S. consumers have become increasingly uneasy about their jobs and personal finances in August, according to the New York Federal Reserve's Survey of Consumer Expectations.

The survey found that households expect inflation at 3.6% a year from now and 3% over the next five years, with expectations for inflation three years ahead edging down to 3.2% from 3.3% in July.

However, this relatively stable inflation outlook masked a deterioration in how consumers viewed the broader economy.

The survey revealed that respondents raised their expectations for the unemployment rate to the highest level since April 2020, when the U.S. economy was reeling from the COVID-19 pandemic.

This increase was broad-based across age, income, and education groups, according to the New York Fed.

Consumers were not necessarily more worried about losing their own jobs, but they became less confident about finding new employment if they were to lose their jobs involuntarily.