NY Fed Survey: One-Year Inflation Expectations Hit 3-Year High at 3.9%

The Federal Reserve Bank of New York's latest Survey of Consumer Expectations, released October 7, 2026, shows median one-year-ahead inflation expectations rising to 3.9% in September from 3.6% the prior month—the highest level since May 2023. Three-year expectations ticked up 0.1 percentage point to 3.3%, while five-year expectations held steady at 3.0%. Consumers anticipate notable price increases across categories: gasoline (+4.8%), food (+5.5%), medical care (+9.2%), college education (+7.5%), and rent (+6.8%).

Labor market sentiment improved despite the inflation uptick. The mean probability of the unemployment rate rising in the next year fell to 43.9%, and the perceived chance of job loss declined to 13.5%—its lowest since December 2024. The probability of voluntarily quitting rose, particularly among workers over 40 without a bachelor's degree. Earnings growth expectations slipped to a 12-month average of 2.6%.

Household financial perceptions worsened for the second consecutive month, with 42% reporting their situation as much or somewhat worse than a year ago. Expected spending growth climbed to 5.5%, the highest since May 2023, outpacing income growth expectations. Debt payment concerns eased slightly, with the probability of missing a minimum payment falling to 12%.

The survey aligns with broader consumer sentiment data showing persistent pessimism amid an economy expanding unevenly, concentrated in sectors like data centers.