On Monday, according to the latest survey released by the New York Federal Reserve, the short-term, medium-term, and long-term inflation expectations of respondents in the U.S. all rose in November, with inflation expectations across all timeframes increasing by 0.1 percentage points. Following Trump's victory in the U.S. presidential election, people's views on household finances reached their most optimistic level since early 2020.
In November, the one-year inflation expectation in the U.S. rose to 3%, up from 2.9% in October; the three-year inflation expectation increased to 2.6%, up from 2.5% in October; and the five-year inflation expectation was 2.9%, up from 2.8% in October.
It is noteworthy that the uncertainty regarding these figures has also increased among respondents. Additionally, there was an overall growth in one-year and three-year inflation expectations, with inflation expectations declining among those without a college degree and rising among those with a college degree.
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In terms of specific categories:
<ul>
<li>Consumers expect gasoline prices to rise by 2.72% over the next year, with the growth expectation decreasing by 0.5 percentage points.</li>
<li>Food prices are expected to rise by 3.77%, with the growth expectation decreasing by 0.5 percentage points.</li>
<li>Medical costs are expected to rise by 5.96%, with the growth expectation increasing by 0.2 percentage points.</li>
<li>College education costs are expected to rise by 6.73%, with the growth expectation increasing by 1 percentage point.</li>
<li>Rent is expected to rise by 5.7%, with the growth expectation decreasing by 0.5 percentage points.</li>
<li>The growth expectation for median home prices remains unchanged at 3%. Since August 2023, the growth expectation for median home prices has fluctuated narrowly between 3.0% and 3.3%.</li>
</ul>
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A notable feature of this survey is that while people's views on their current household financial situation have not changed significantly compared to a year ago, expectations for the future have improved significantly. The Federal Reserve's survey of about 1,300 households shows:
<blockquote>
The proportion of households expecting their financial situation to improve in a year surged to 37.6%, an increase of about 8 percentage points from October, reaching the highest level since February 2020, just before the outbreak of the COVID-19 pandemic.
The proportion of individuals expecting their personal financial situation to worsen decreased to 20.7%, down nearly 2 percentage points from a month ago, marking the lowest level since May 2021.
The proportion of consumers expecting to be unable to pay the minimum debt in the next three months decreased to 13.15%, down from 13.89% in October.
The median value of expected household spending growth decreased to 4.7%, the lowest level since April 2021, with a monthly decrease of 0.2 percentage points.
</blockquote>
Analysis indicates that following Trump's victory in the U.S. presidential election, people's optimism about household finances is at its highest level in years, as Trump has promised to implement a series of tax cuts and deregulation measures to promote U.S. economic growth
The key points related to the labor market in this survey are as follows, with mixed results:
<blockquote>
The median expectation for income growth over the next year among respondents rose to 3%, an increase of 0.2 percentage points, mainly driven by those without a college degree.
The average unemployment expectation, or the average probability of the U.S. unemployment rate rising a year from now, increased by 0.5 percentage points in November to 35.0%, significantly lower than the average of 37.0% over the past 12 months.
The average perceived probability of unemployment over the next 12 months rose by 0.5 percentage points to 13.5%.
The average probability of voluntary resignation over the next 12 months decreased by 0.3 percentage points to 20.2%.
The average perceived probability of finding a new job if one loses their current job decreased by 1.9 percentage points to 54.1%. This decline was observed across all age groups and education levels.
</blockquote>
The Federal Reserve's survey also showed:
<ul>
<li>Consumers are more optimistic about the outlook for the U.S. stock market. The average perceived probability of the U.S. stock market rising a year from now increased by 1.3 percentage points to 40.4%.</li>
<li>The average perceived probability of an increase in savings account interest rates over the next 12 months rose by 2.1 percentage points to 26.7%.</li>
<li>The median expectation for government debt growth over the next year significantly decreased by 2.3 percentage points to 6.2%, the lowest level since February 2020.</li>
<li>Based on current income levels, the median expectation for changes in taxes over the next year decreased by 0.6 percentage points to 3.4%</li>
</ul>

In November, the short-term, medium-term, and long-term inflation expectations of respondents in the United States all rose, with inflation expectations for all terms increasing by 0.1 percentage points. With Trump winning the U.S. presidential election and his plans to implement a series of tax cuts and deregulation measures, Americans' views on household finances reached their most optimistic level since early 2020

- The New York Federal Reserve's November survey indicates a rise in short-term, medium-term, and long-term inflation expectations, each increasing by 0.1 percentage points.  
- Optimism regarding household finances has reached its highest level since early 2020, with 37.6% of respondents expecting improvement in their financial situation over the next year.  
- The survey also reveals mixed sentiments about the labor market, with a slight increase in income growth expectations and a rise in perceived unemployment probabilities.

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Federal Reserve Survey: U.S. inflation expectations rise in November, households' financial outlook is the most optimistic since early 2020