US Consumers Grow Pessimistic as Job Market and Finances Come Under Pressure

U.S. consumers are growing increasingly uneasy about their job prospects and personal finances as inflation expectations remain high, according to the latest Survey of Consumer Expectations from the New York Federal Reserve.

The survey found that households expect inflation to be 3.6% a year from now and 3% over the next five years, with some decline in expectations for inflation three years ahead to 3.2%.

However, this relatively stable inflation outlook masks a deterioration in how consumers view the broader economy, particularly when it comes to employment.

Respondents raised their expectations for where the unemployment rate will stand a year from now to the highest level since April 2020, with broad-based increases across age, income, and education groups.

This combination points to a more fragile view of the labor market, with households appearing less confident about their ability to recover from job loss even as immediate fears of unemployment ease.