US households’ inflation expectations edged lower in July 2026, according to the New York Fed, while longer-term expectations remained unchanged. One-year inflation expectations fell to 3.6%, while three- and five-year expectations stayed at 3.3% and 3.0%. Gas price expectations rebounded, while expected increases in rent and medical costs declined.
Labor market sentiment was mixed, with consumers becoming more concerned about unemployment and job losses but slightly more confident about finding work. Expectations for earnings growth remained steady at 2.8%.
Households also reported somewhat improved views of their current and future finances and became less pessimistic about future credit availability. Spending growth expectations eased slightly, although concerns about missing debt payments increased, particularly among lower-income households. Meanwhile, expectations for higher stock prices reached their highest level since April 2021.
