US short-term inflation outlook eased in October: NY Fed

US households’ short-term inflation expectations eased in October 2025, while medium- and longer-term views remained steady, The Federal Reserve Bank of New York’s Center for Microeconomic Data has reported.

The latest Survey of Consumer Expectations, fielded from October 01 to October 31, 2025, also pointed to worsening labour market sentiment and reduced confidence in future household financial conditions, even as consumers saw some improvement in credit access.

Median inflation expectations fell by 0.2 percentage point to 3.2 per cent over the one-year horizon, while remaining unchanged at 3 per cent over the three- and five-year outlooks. Disagreement among respondents widened across all timelines. Inflation uncertainty stayed flat in the short term but eased over the medium and longer horizons.

Earnings growth expectations edged up to 2.6 per cent, though still below the 12-month trailing average of 2.7 per cent. The mean perceived probability that the unemployment rate will be higher in one year increased for a third consecutive month to 42.5 per cent, New York Fed said in a release.

While job loss expectations improved slightly to 14 per cent, the expected quit rate declined to 18.8 per cent. The perceived probability of finding a job if one were lost fell to 46.8 per cent, notably below its recent average, with declines driven mainly by respondents under 60 and those with higher education.

Expected household income growth slipped marginally to 2.8 per cent, while spending growth expectations edged up to 4.8 per cent.

Respondents reported improved credit availability, with fewer saying access had tightened and more indicating it had become easier. Expectations for future credit conditions also improved.

Households felt less confident about their financial future, with more expecting their situation to worsen over the next year. Expectations for higher saving account interest rates remained unchanged. The perceived probability of higher US stock prices in the next 12 months fell to 38.9 per cent.

ALCHEMPro News Desk (HU)