Inflation is not looking quite so scary to American consumers, according to new data from the Federal Reserve Bank of New York that suggests a broader cooldown could be on the way.
Driving the news: In the bank's Survey of Consumer Expectations, the median expected inflation over the next year fell to 3.8% in June, from 4.1% in May, notching a third straight month of decline and reaching its lowest level since April 2021.
Yes, but: At the long-term horizon, survey respondents' inflation expectations rose, with three-year expected inflation unchanged and five-year expectations rising to 3%, from 2.7%.
- And consumers were more pessimistic about the job market outlook, with their average stated odds of losing their job in the next year rising 2 percentage points to 12.9%, the highest since November 2021.
- And median expected spending growth over the next year declined to 5.2%, from 5.6% in May, reaching the lowest level since September 2021.
Between the lines: Putting it all together, Americans anticipate a cooldown in the economy without recessionary conditions, in which they spend less and are a little more worried about job loss but experience more modest inflation than in the recent past.
- To the degree expectations can be self-fulfilling, that's a soft-landing story.