US consumers steady on inflation but gloomier on finances

US consumers held steady in their inflation expectations in November, but signalled growing financial strain and sharply rising concerns over medical costs, according to the Federal Reserve Bank of New York's latest Survey of Consumer Expectations released Monday.

The survey showed that median inflation expectations were unchanged at 3.2% for the one-year horizon and 3.0% for both three- and five-year horizons, with respondents also reporting less disagreement about the outlook for price growth.

Inflation uncertainty held steady in the near term and fell at the five-year horizon.

Medical-cost expectations, however, jumped to their highest level since early 2014. Households now expect medical care costs to rise 10% over the next year, a 0.7-percentage-point increase from October. Expectations for food, gas, rent, and college-cost inflation also rose modestly.

Home-price expectations remained unchanged at 3% for the sixth consecutive month.

Labour-market sentiment improved slightly. Respondents reported a lower perceived probability of losing their job over the next year, falling to 14%, the lowest since December 2024.

The expected unemployment rate a year ahead also fell marginally to 42%. However, the expected quit rate declined to its lowest since February 2025, suggesting reduced worker confidence in job switching.

Household finances showed signs of strain. Though expected income growth ticked up to 2.9%, respondents grew more pessimistic about both their current and future financial situations.

A rising share reported being worse off than a year ago, while fewer expect to be better off next year.

Expectations for household spending growth edged up to 5.0%, but perceptions of access to credit deteriorated. The share of respondents reporting it is harder to obtain credit than a year ago increased, and more households expect difficulties making minimum debt payments.

The perceived probability of missing a payment in the next three months rose to 14%.

Participants also anticipate higher taxes and government debt. Expected tax increases climbed to 4.1%, the highest since mid-2024, while forecasts for growth in federal debt rose to 9.2%.

Respondents were slightly less optimistic about the stock market outlook: the perceived probability that equity prices will be higher in a year slipped to 38%.

The monthly survey is conducted among a nationally representative panel of about 1,200 US household heads and tracks views on inflation, labour markets, credit access, and personal finances.