Americans remained anxious in December about their job prospects during the pandemic, and people’s expectations for finding new work after becoming unemployed plunged to the lowest level since February 2014, according to a survey released on Monday by the New York Federal Reserve.
Consumers estimated they had a 46.2% chance of finding jobs after becoming unemployed, down from 47.9% in November.
Workers also said their odds of becoming unemployed were slightly higher, with the perceived chances of losing a job over the next year rising to 15.0% in December from 14.6% in November. The increase was driven by people without a college education.
Despite the worries about the labor market, consumers said they expect inflation to pick up over the medium term and for home prices to keep rising.
Median expectations for how inflation will change over the next three years rose for the second straight month, reaching 3.0% in December from 2.8% in November. Inflation expectations for the next year stayed flat at a median of 3.0%, according to the survey of consumer expectations, which is a monthly poll based on a rotating panel of 1,300 households.
But consumers also said they were less certain about how inflation might change. Disagreement over the three-year outlook for inflation also rose to the highest level since May 2020.
The cost of medical care is expected to rise by 9.1% over the next year, up from 7.1% in November. Consumers also expect to pay slightly more for essentials such as rent, food and gasoline.
Expectations for how home prices will rise over the next year rose sharply to 3.6% in December from 3.0% in November, reaching the highest level since July 2018. Home price appreciation expectations have been rising since April 2020, when they dropped to zero at the height of uncertainty over the pandemic.
The housing market turned out to be a bright spot in the U.S. economy during the crisis, buoyed by low interest rates and workers seeking more space for their home offices and virtual schooling.
Source: Reuters |
