A recent survey by the Federal Reserve Bank of New York, unveiled on Monday, highlights rising consumer apprehensions regarding inflation, unemployment, and stock market volatility amid escalating global trade tensions in March.
The Fed’s monthly Survey of Consumer Expectations indicated that participants anticipated inflation over the next year to hit 3.6%, marking a half-point increase compared to February and representing the highest forecast since October 2023.
Accompanying the heightened inflation worries was a notable increase in anxiety surrounding the job market. The likelihood of a rise in the unemployment rate over the coming year surged to 44%, a jump of 4.6 percentage points, the highest level recorded since the early days of the Covid-19 pandemic in April 2020.
The survey findings suggested that this unease is also affecting perceptions of the stock market. The forecast that equity prices would increase a year from now slipped to 33.8%, down 3.2 percentage points and reaching the lowest expectation recorded since June 2022. Conversely, respondents expressed optimism about gold prices, predicting a rise of 5.2%, a peak not observed since April 2022.
This sentiment aligns with data from other sources, including the University of Michigan’s consumer sentiment survey, which recorded one-year expectations at their highest since November 1981 in mid-April.
The New York Fed’s survey was conducted prior to President Donald Trump’s April 2 announcement regarding a tariff “liberation day” and the subsequent 90-day suspension of the order a week later. Nevertheless, its results are consistent with various indicators reflecting consumers’ concerns over the repercussions of tariffs, even as trader sentiment appears to indicate lower inflation fears.
Expectations regarding inflation over the next five years slightly decreased to 2.9%, a 0.1 percentage point dip, while projections for the three-year period remained steady at 3%. Anticipations for food prices a year out increased to 5.2%, the highest since May 2024, and expectations for rent rose to 7.2%, marking a half-point increase. Furthermore, expected medical care costs are projected to jump to 7.9%, the most significant increase since August 2024.
Respondents also foresee gasoline prices rising by 3.2%, though this represents a half-point reduction from the February outlook.
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