The Federal Reserve Bank of New York’s Center for Microeconomic Data has released its June 2025 Survey of Consumer Expectations, which shows that households’ inflation expectations ticked down at the short-term horizon, and remained unchanged at the medium- and longer-term horizons. Households were more optimistic about their year-ahead financial situations and credit access. Unemployment and job loss expectations improved. Spending growth expectations slightly declined, while household income growth expectations increased. Households were more optimistic about their year-ahead financial situations and credit access.
Key findings from the Federal Reserve Bank of New York’s June 2025 Survey include:
Household Finance
- The median expected growth in household income increased by 0.2 percentage point to 2.9% in June, equaling its 12-month trailing average.
- Median household spending growth expectations declined by 0.2 percentage point to 4.8%.
- Perceptions of credit access compared to a year ago showed a smaller share of households reporting it is harder to get credit. Expectations for future credit availability also improved, with a smaller share of respondents expecting it will be harder to obtain credit in the year ahead.
- The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.4 percentage points to 12.0%, reaching the lowest level since May 2024.
- The median expectation regarding a year-ahead change in taxes at current income level increased by 0.2 percentage points to 3.5%.
- Median year-ahead expected growth in government debt increased by 1.9 percentage points to 7.3%, the highest reading since October 2024.
- The mean perceived probability that the average interest rate on savings accounts will be higher in 12 months decreased by 1.7 percentage points to 23.7%.
- Perceptions about households’ current financial situations compared to a year ago improved markedly with a smaller share of households reporting a worse financial situation and a larger share of households reporting a better financial situation. Year-ahead expectations about households’ financial situations also improved, with a smaller share of households expecting a worse financial situation and a larger share of households expecting a better financial situation in one year from now.
- The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.3 percentage points to 36.0%.
Inflationary Concerns
- Median inflation expectations decreased by 0.2 percentage point to 3.0% at the one-year-ahead horizon. They were unchanged at the three-year- (3.0%) and five-year-ahead (2.6%) horizons in June. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) decreased at all horizons.
- Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at the one- and three-year-ahead horizons and was unchanged at the five-year-ahead horizon.
- Median home price growth expectations remained unchanged at 3.0%. This series has been moving in a narrow range between 3.0% and 3.3% since August 2023.
- Median year-ahead commodity price change expectations increased by 1.5 percentage points for gas to 4.2%, by 1.9 percentage points for the cost of medical care to 9.3% (the highest level since June 2023), by 1.6 percentage points for the cost of college education to 9.1%, and by 0.7 percentage point for rent to 9.1%. Median year-ahead expected change in food prices remained unchanged at 5.5%.
The State of Employment
- Median one-year-ahead earnings growth expectations fell by 0.2 percentage point to 2.5% in June, remaining below its 12-month trailing average of 2.8%. The series has been moving within the range between 2.5% and 3.0% since May 2021.
- Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.1 percentage point to 39.7%. The series remains above its 12-month trailing average of 37.9%.
- The mean perceived probability of losing one’s job in the next 12 months decreased by 0.8 percentage point to 14.0%, its lowest level since December 2024. The decrease was broad-based across age and education groups. The mean probability of leaving one’s job voluntarily in the next 12 months increased by 0.5 percentage point to 18.8%, remaining below its 12-month trailing average of 19.3%.
- The mean perceived probability of finding a job if one’s current job was lost decreased by 1.1 percentage point to 49.6%. The series remains well below its 12-month trailing average of 52.1%.
The Bureau of Labor Statistics (BLS) found in its June employment report that the U.S. economy added 147,000 jobs, exceeding economists’ expectations of around 110,000. The unemployment rate remained steady at 4.1%.
“While the June pop in jobs, combined with upward revisions to March and April reports, signal hiring has stabilized following a sluggish start to 2025, it means July will be a dud, with a Fed rate cut unlikely and dropping the odds for a move in September,” said First American Senior Economist Sam Williamson.
Mortgage Bankers Association (MBA) SVP and Chief Economist Mike Fratantoni added: “The unemployment rate dropped back to 4.1%, but this was the result of more individuals leaving the labor force rather than gaining employment, as the labor force participation rate dropped again. Wage growth slowed again in June to a 3.7% rate over the last 12 months. Taken together, these data indicate a job market that is holding up reasonably well given the uncertainties facing this economy. While there are certainly some signs of softening in the private sector, the report is likely to keep the Federal Reserve on hold for now. MBA is still forecasting two cuts from the Fed this year.”
The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers’ outlooks. Expectations are also available by age, geography, income, education, and numeracy.
Click here for more on the Federal Reserve Bank of New York’s Center for Microeconomic Data’s June 2025 Survey of Consumer Expectations.
