New York Fed survey: U.S. inflation expectations largely stable, willingness to quit jobs hits record low

The latest survey from the New York Federal Reserve Bank shows that overall, American consumers' expectations for future inflation remain stable, but there is a divergence in confidence regarding employment prospects. In particular, the willingness to voluntarily quit jobs has fallen to historically low levels, reflecting the impact of labor market uncertainty on household decisions. According to the monthly Consumer Expectations Survey released by the New York Fed on Monday, respondents' median expectation for the inflation rate in the next year is 3%, slightly lower than 3.1% in January. At the same time, consumers' expectations for the inflation rate in the next three and five years remain at 3%, indicating that long-term inflation expectations are overall stable. The survey was conducted from February 2 to February 28, so it does not reflect the recent impact of the Iran conflict leading to an increase in energy prices on consumer sentiment. In terms of employment, the survey shows that consumers' confidence in the labor market has weakened. Respondents believe that the probability of finding a new job in the next three months after losing their current job has decreased. At the same time, consumers' expectations for voluntary quits have fallen slightly below 16%, the lowest level since the survey began in 2013, indicating that more and more employees are choosing to stay in their current jobs in the current environment rather than actively seeking new ones. Recent data also indicate signs of cooling in the US job market. Data released by the US government showed a slight increase in the unemployment rate to 4.4% in February, with a decrease of 920,000 nonfarm jobs. Against this backdrop, some Federal Reserve officials have pointed out that multiple household surveys show an increasing concern among consumers about the job market. However, the New York Fed's survey also shows some improvement in certain employment risk indicators. Respondents believe that the probability of losing a job in the next year is 13.8%, the lowest level since November 2021, indicating that while there is some wavering in job confidence, overall risk perception remains relatively stable. At the same time, consumers' expectations regarding their financial situation have improved slightly. The survey shows that the average likelihood of not being able to repay the minimum debt on time in the next three months has fallen to the lowest level since February 2024. The market widely expects the Federal Reserve to keep interest rates unchanged at the policy meeting in Washington next week. However, against the backdrop of a slowdown in the job market and changes in consumer confidence, the survey results may still be an important reference for policymakers to assess the economic outlook.