Americans expect inflation to rise faster over the next year and three years, reaching levels not seen since 2023 and 2022 respectively, according to the June 2026 Survey of Consumer Expectations released today by the Federal Reserve Bank of New York's Center for Microeconomic Data. The survey shows households' short- and medium-term inflation expectations increased while longer-term views held steady, even as gas price growth expectations dropped to their lowest level in nearly four years. The findings suggest Americans are growing more optimistic about their financial futures and job prospects despite persistent inflation concerns.
Median inflation expectations at the one-year horizon jumped 0.2 percentage points to 3.7% in June, the highest reading since September 2023. Three-year expectations also rose 0.2 percentage points to 3.3%, the highest since June 2022, while five-year expectations remained unchanged at 3.0%. Gas price expectations told a different story, falling 3.5 percentage points to just 1.5%—the lowest since August 2022. Other price expectations showed mixed results: medical care costs are expected to rise 9.4%, up 0.5 percentage points, while rent expectations jumped 0.9 percentage points to 8.3%. Food price growth expectations dropped 0.8 percentage points to 5.0%, and college education costs fell 2.3 percentage points to 5.7%. Home price growth expectations decreased 0.3 percentage points to 3.2%.
Labor market expectations improved across nearly every measure. The mean probability of losing one's job in the next 12 months decreased 1.0 percentage point to 14.1%, falling below the 12-month average of 14.5%. Job-finding expectations increased 1.2 percentage points to 44.9%, driven primarily by respondents with household incomes under $50,000. Mean unemployment expectations—the probability that the U.S. unemployment rate will be higher one year from now—decreased 1.5 percentage points to 41.7%. Median earnings growth expectations rose 0.1 percentage point to 2.8%, the highest since March 2025. The expected quit rate declined sharply, falling 3.5 percentage points to 17.3%, below its 12-month average.
Household financial sentiment showed notable improvement. The average perceived probability of missing a minimum debt payment over the next three months decreased 1.8 percentage points to 10.8%, the lowest reading since April 2023, with declines broad-based across age and education groups. More households reported better current financial situations compared to a year ago, and a larger share expect their financial situation to improve over the next year. The mean perceived probability that U.S. stock prices will be higher in 12 months increased 2.9 percentage points to 40.9%, the highest level since April 2021. Median household income growth expectations rose 0.2 percentage points to 3.0%, while spending growth expectations held steady at 5.0%.
The report reveals a complex consumer outlook where inflation worries persist at elevated levels even as specific price pressures ease and financial confidence grows. The divergence between rising overall inflation expectations and falling gas price expectations suggests households are experiencing uneven price pressures across different categories. The survey's finding that stock market optimism reached its highest point in five years while Americans simultaneously expect higher inflation reflects growing confidence that the economy can sustain both price growth and asset appreciation. Credit access expectations deteriorated slightly, with more respondents expecting it will be harder to obtain credit in the year ahead, though perceptions of current credit availability improved. The June survey was fielded from June 1 through June 30, 2026, and draws from a nationally representative panel of approximately 1,300 household heads. The combination of stronger labor market expectations, improved financial sentiment, and record stock market optimism suggests Americans are cautiously hopeful about their economic prospects despite inflation concerns that remain well above pre-pandemic norms.