More Than One-Third of U.S. Households Expect Worse Finances in a Year

by Kim Minyoung

Published 09 May.2025 11:13(KST)

New York Fed's April Monthly Survey Results
Three-Year Inflation Expectations Reach Highest Level in Three Years

Americans' expectations for inflation three years from now have risen to their highest level in nearly three years. In addition, more than one-third of U.S. households expect their financial situation to worsen over the next year.

AFP Yonhap News

According to Bloomberg News on May 9, the Federal Reserve Bank of New York's April monthly survey showed that the median expected inflation rate three years from now was 3.2%, the highest since July 2022.

This report was released after the Federal Reserve decided to keep its short-term interest rate target unchanged. At that time, the Fed assessed that the U.S. economy remained resilient despite uncertainty caused by U.S. tariff policies and concerns about an economic slowdown.

Respondents expected greater upward pressure on prices for housing, gasoline, and college tuition over the next year. They also projected that home prices would rise by 3.3% in April, up from 3% in March.

Expectations regarding employment have also declined significantly. The outlook for finding a job within the next three months fell to its lowest level since March 2021, with the decline being particularly pronounced among those aged 60 and older.

The expectation that the unemployment rate will rise one year from now reached its highest level since April 2020, at the onset of the COVID-19 pandemic. As outlooks for both inflation and the labor market have darkened, perceptions of future household finances have also deteriorated.

More than one-third of households expect their financial situation to be worse a year from now than it is today, the highest proportion since 2022. The proportion of respondents who said their household finances are worse now than a year ago also exceeded one-third.

The percentage of households expecting to be unable to make even minimum debt payments over the next three months also increased. The expected growth rate of household income fell to its lowest level since April 2021.