Federal Reserve Survey: U.S. Three-Year Inflation Expectations Hit Record Low

Household spending expectations are weak, but unemployment expectations have surprisingly improved. According to a consumer survey released by the New York Fed, U.S. consumers' one-year and five-year inflation expectations remained stable in July, while three-year expectations fell sharply, reaching a record low of 2.3% since data tracking began in 2013. The expected increase in household spending for July was 4.9%, the lowest since April 2021. Surprisingly, unemployment expectations improved, contradicting the weak non-farm payroll data.