NEW YORK — U.S. consumers expect inflation to linger in the long term, according to the January Survey of Consumer Expectations from the Federal Reserve Bank of New York.

Released Monday, the survey showed that Americans expect inflation to be 3% one year from now and to remain at that level in five years.

What You Need To Know

  • U.S. consumers expect inflation to linger in the long term, according to the January Survey of Consumer Expectations from the Federal Reserve Bank of New York

  • Released today, the survey showed that Americans expect inflation to be 3% one year from now and to remain at that level in five years

  • Fed Chair Jerome Powell has targeted a U.S. inflation rate of 2%

  • The rate of inflation in January was 2.9%, according to the U.S. Bureau of Labor Statistics

The Federal Reserve's year-over-year target inflation rate is 2%. The most recent rate of inflation in January was 2.9% compared to a year earlier, according to the U.S. Bureau of Labor Statistics.

The Fed's January survey found that Americans expect gas, food, medical care, education and rent to increase in price. In one year, consumers expect gas prices to increase 0.6%, to 2.6%, and food prices to rise 0.6%, to 4.6%. They also expect medical care costs to increase 1%, to 6.8%, and rent to climb 0.5%, to 6%.

At the same time consumers expect prices to increase in the future, they see their household finances improving. The expect their incomes to increase 0.2%, to 3%, in the coming year and for their spending growth to fall 0.4%, to 4.4% — the lowest reading since January 2021.

Even so, more Americans also feel uncertain about their employment. Individuals’ perceptions of losing their job in the next 12 months increased 2.3% to 14.2% and was most pronounced for workers over the age of 60. 

Workers whose household incomes are less than $50,000 said the probability of leaving their jobs voluntarily in the next 12 months also increased by 1.7%, to 19.9%.