Fed Survey: Americans Fear Rising Inflation and Lower Job Prospects

The latest survey from the Federal Reserve Bank of New York reveals that Americans are becoming increasingly worried about accelerating inflation and weakening job opportunities. According to the data released Thursday, people expect the cost of living to rise, while confidence in finding new employment has dropped to a record low.

Inflation Expectations on the Rise Surveyed households now anticipate that inflation will reach 3.4% over the next 12 months, up from 3.2% in November. Long-term expectations remain unchanged, with 3.0% projected inflation over both the three- and five-year horizons.

Record-Low Confidence in Finding a New Job Among those currently employed, only 43.1% believe they could find a new job if they lost their current one—the lowest level since tracking began in 2013. The biggest declines in job confidence came from: Individuals earning less than $100,000 per yearPeople over 60 years oldThose with only a high school diploma

Household Finances: Debt Worries Intensify An increasing number of Americans fear falling behind on debt payments. The chance of missing a minimum debt payment in the next three months rose to 15.3%, the highest level since April 2020, during the early days of the pandemic. The most vulnerable groups include: Adults over 60Households earning under $50,000Individuals without college degrees Price Projections: Health and Housing Costs Lead the Way When asked about specific categories, respondents predicted the following price increases: 🔹 Gasoline: +4.0% (slight decrease from last month)

🔹 Food: +5.7%

🔹 Healthcare: +9.9%

🔹 College tuition: +8.3%

🔹 Rent: +7.7%

Wages, Income & Spending: Real Growth Remains Weak Expected wage growth declined to 2.5%, staying below the 12-month average.

Households believe their income will grow by 3.0%, while spending will rise by 4.9%.

Survey respondents said obtaining credit is now harder—and they don’t expect it to improve soon.

Job Security: More Fear of Layoffs Probability of being laid off within a year: 15.2% (above the 12-month average)Likelihood of quitting voluntarily: 17.5% (decline)Chance of higher unemployment in 12 months: 41.8% (slightly down from November) Government Debt & Market Outlook: Mixed Sentiment Respondents expect U.S. federal debt to grow by 9.0% in 2026—well above the 12-month average of 6.5%. In contrast, only 23.4% believe interest rates on savings accounts will rise in the next year. Confidence in the stock market improved slightly, with a 38.0% chance that equity prices will be higher 12 months from now.

Summary: Americans Face Pressure from Both Sides The U.S. public is increasingly caught between rising inflation and diminishing job security. The survey results arrive just ahead of critical economic data on employment and inflation, which could heavily influence the Fed’s next interest rate decision at the end of the month.

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