Americans expect faster inflation over the next year, New York Fed survey shows

Americans expect prices to climb faster in the coming year, while their confidence in finding work has sunk to the lowest point on record, new data from the Federal Reserve Bank of New York showed Thursday.

People surveyed now think prices will go up 3.4% over the next 12 months, a jump from the 3.2% they predicted in November. At the same time, workers said they’d have just a 43.1% chance of landing a job if they lost their current one. That’s the bleakest outlook since the New York Fed started tracking this figure in mid-2013.

The findings paint a picture of an American public caught between two worries, rising costs and shrinking job prospects. This split mirrors tensions inside the Federal Reserve itself, where some policymakers remain focused on tamping down inflation while others worry more about people losing their jobs. The disagreement makes it unlikely the central bank will change interest rates when officials meet later this month.

The survey results arrived just ahead of key economic reports. The Bureau of Labor Statistics plans to release monthly employment numbers Friday, followed by consumer price data on Jan. 13.

Researchers polled households from December 1 through December 31, 2025. Beyond the headline numbers, the survey revealed Americans are getting more nervous about falling behind on their bills. People put the chance of missing a minimum debt payment in the next three months at 15.3%, the worst reading since April 2020, when the pandemic first hit.

Yet there was a bright spot. More people than at any time since February 2025 said they expect their money situation to get better over the next year.

Price forecasts stayed flat

They still expect inflation of 3.0% over both three years and five years. Home prices, which have been stuck in a tight range for more than two years, are also expected to rise 3.0%, the seventh straight month at that level.

When asked about specific goods and services, people predicted smaller increases for most categories. They expect gas prices to climb 4.0%, down slightly from the previous month. Food costs are seen rising 5.7%, while medical care expenses could jump 9.9%. College tuition is forecast to go up 8.3%, and rent payments are expected to increase 7.7%.

On the work front, people expect their pay to grow 2.5% over the next year, a small dip that leaves earnings growth below its average for the past 12 months. The average person surveyed put the odds of higher unemployment a year from now at 41.8%, though that figure actually dropped a bit from November.

Workers are more worried about losing their jobs now than ever

They pegged the chance of getting laid off in the next year at 15.2%, above the average of the past 12 months. Meanwhile, the likelihood of quitting voluntarily fell to 17.5%.

The gloomiest job-finding outlook hit hardest among certain groups. People making less than $100,000 a year drove most of the decline. Those over 60 and people with only a high school education saw the sharpest drops in confidence.

On household finances, people think their income will grow 3.0% over the next year, while they expect to spend 4.9% more. Getting credit has become harder, according to survey responses, and people think it will stay difficult.

The probability of missing debt payments jumped most for those over 60, people with just a high school diploma, and households earning under $50,000 annually.

People expect government debt to balloon 9.0% over the next year, well above the typical projection of 6.5% over the past 12 months. They’re less optimistic about savings account interest rates, putting just a 23.4% chance on rates being higher in a year.

Stock market sentiment edged up slightly, with people seeing a 38.0% probability that share prices will be higher 12 months from now.

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