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Consumers’ inflation expectations decline in July

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But less optimistic about finding new jobs: New York Fed

According to the Federal Reserve Bank of New York’s Center for Microeconomic Data’s Survey of Consumer Expectations, consumers’ expectations for inflation substantially declined in July, but they were less optimistic about their ability to find a new job in the next three months.

Reports revealed that the median inflation expectations for one year ahead fell to 6.2% in July from 6.8% in June. The decline was broad-based across income groups but largest among respondents with annual household incomes of less than $50,000 and no more than a high school education.

Looking at the labor market, median one-year-ahead earnings growth remained unchanged for the seventh consecutive month in July at 3.0%.

Mean unemployment expectations — or the mean probability that the US unemployment rate will be higher one year from now — fell by 0.2 of a percentage point to 40.2% in July.

The mean perceived probability of losing one’s job in the next 12 months declined slightly to 11.8% in July from 11.9% in June. It remained below its pre-pandemic reading of 13.8% in February 2020.

The mean probability of leaving one’s job voluntarily in the next 12 months rose to 19.5% in July from 18.6% in June. The series has moved within a narrow 18.6% to 20.4% range over the past year.

Meanwhile, the mean perceived probability of finding a job in the next three months (if one’s current job was lost) declined to 55.9% in July from 56.8% in June, moving slightly below its trailing 12-month average of 56.5%.

The report draws data from an internet-based survey of a rotating panel of approximately 1,300 household heads.


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