US Macro Updates

Key takeaway: For a 3rd month in a row, the inflation expectations data in the latest NY Fed Consumer Survey report was mostly stable. This is in contrast to the sharp drops in 1 year ahead inflation expectations that we had seen through most of 2023. Data for the month of October showed one year inflation expectations inched lower slightly from 3.7% to 3.6%. Medium term and long term inflation expectations were also mostly unchanged (in the 2.7% to 3.0% range). Median home price growth expectations were unchanged at 3.0% in October. This number is still well above the series 12-month trailing average of 2.1%. Residential real estate has seen a mini-boom since the start of 2023. Any rise in real estate appreciation expectations can have downstream effects on future consumer inflation. On the other hand, median one year ahead wage gain expectations remain anchored within a range of 2.8% to 3.0%. The latest print in October saw one year ahead wage growth expectations fall from 3.0% in September to 2.8% in October. Overall, this report was a steady-as-it-gets report.   

• NY Fed Survey US Consumer Inflation Expectations at 3.6% in Oct (Sep 2023 : 3.7%)

10th Oct 2023

Key takeaway: For a 2nd month in a row, the inflation expectations data in the latest NY Fed Consumer Survey report was mostly stable. This is in contrast to the sharp drops in 1 year ahead inflation expectations that we had seen through most of 2023. Data for the month of September showed one year inflation expectations inched up slightly from 3.6% to 3.7%. Medium term and long term inflation expectations were also mostly unchanged (in the 2.8% to 3.0% range). Median home price growth expectations decreased from 3.1% in August to 3.0% in September. This number is still well above the series 12-month trailing average of 2.0%. Residential real estate has seen a mini-boom since the start of 2023. Any rise in real estate appreciation expectations can have downstream effects on future consumer inflation. On the other hand, median one year ahead wage gain expectations remain anchored within a range of 2.8% to 3.0%.  

• NY Fed Survey US Consumer Inflation Expectations at 3.7% in Sep (Aug 2023 : 3.6%)

11th Sep 2023

Key takeaway: Unlike recent consumer survey reports, the inflation expectations data in the latest NY Fed Consumer Survey report was mostly stable. One year ahead inflation expectations had rapidly declined in the past few months. Data for the month of August showed one year inflation expectations inched up slightly from 3.5% to 3.6%. Medium term and long term inflation expectations were also mostly unchanged (in the 2.8% to 3.0% range). Median home price growth expectations increased from 2.8% in July to 3.1% in August. This number is still well above the series 12-month trailing average of 2.0%. Residential real estate has seen a mini-boom since the start of 2023. Any rise in real estate appreciation expectations can have downstream effects on future consumer inflation. On the other hand, median one year ahead wage gain expectations remain anchored within a range of 2.8% to 3.0%.  

• NY Fed Survey US Consumer Inflation Expectations at 3.6% in August (July 2023 : 3.5%)

14th Aug 2023

Key takeaway: The decline in one year ahead inflation expectations continued in August for the 4th month in a row. The one year ahead inflation expectations have fallen sharply – from 4.7% in March to 4.4% in April to 4.1% in May to 3.8% in June and now finally to 3.5% in July. This is welcome news from the Fed’s inflation fighting perspective. Median inflation expectations also remained fairly anchored in the range of 2.8% to 3.0%. Median home price growth expectations decreased from 2.9% in June to 2.8% in July. However, this number is still well above the series 12-month trailing average of 2.0%. Residential real estate has seen a mini-boom since the start of 2023. Any rise in real estate appreciation expectations can have downstream effects on future consumer inflation. On the other hand, median one year ahead wage gain expectations remain anchored within a range of 2.8% to 3.0%.  

• NY Fed Survey US Consumer Inflation Expectations at 3.5% in July (June 2023 : 3.8%)

10th Jul 2023

Key takeaway: For the 3rd month in a row, one year ahead inflation expectations have fallen sharply – from 4.7% in March to 4.4% in April to 4.1% in May and finally now down to 3.8% in June. This is welcome news from the Fed’s inflation fighting perspective. Similarly median inflation expectations remained fairly anchored with the 3 year ahead inflation expectations remaining the same at 2.8% and the 5 year ahead inflation expectations increasing by 0.3% to 3.0%. However, on the other hand, median home price appreciation expectations also increased for the fifth consecutive month from 2.6% in May to 2.9% in June. Median one year ahead wage growth expectations increased by 0.2% in June. However, this data point has been fairly range bound between 2.8% to 3.0% since Sep 2021. 

• NY Fed Survey US Consumer Inflation Expectations at 3.8% in June (May 2023 4.1%)

12th Jun 2023

Key takeaway: The Michigan Consumer Survey, The Conference Board Consumer Survey and the NY Fed Survey of Consumer Expectations are the 3 most important surveys that are used to gauge strength, current views and future expectations of the US consumer with respect to a variety of factors including inflation, wages and spend. The Fed pays close attention to each of these 3 surveys to keep its fingers on the consumer’s pulse. The latest survey results for the month of May from the NY Fed were positive overall. Firstly, short term inflation expectations which had jumped sharply in March, fell for 2 consecutive months in April and May. At 4.1%, the one year ahead inflation expectations reading is the lowest since May 2021. This will be welcome news for the Fed ahead of its Tuesday meeting. Median inflation expectations (3 years) have remained range bound at 2.8% – 2.9% and long term inflation expectations also remained range bound at 2.5 – 2.7%. It is key to highlight that these range bound longer term inflation expectation numbers (in all the 3 surveys) have been one of the key reasons the Fed believes that inflation expectations are still well anchored. Median one year ahead wage growth expectations have also been fairly range bound. In May, the one year ahead wage growth expectations fell from 3.0% to 2.8%. Household spending growth expectations increased back from 5.2% in Apr from 5.6% in May. This indicator too has been trending down since hitting a peak of 9.0% in May 2022. Lastly, median home price growth expectations increased  for the 4th consecutive month from 2.5% in Apr to 2.6% in May. While this is still below the past 12 month trailing average of 3.0% as well as pre-pandemic levels, the reading should be considered together with other current data observed in the US Residential Market. The housing market seems to have reached a bottom with significant activity in the new home sales market and rising prices seen in reports from private players in the Housing market. 

• NY Fed Survey US Consumer Inflation Expectations at 4.1% (Apr 2023 4.4%)

8th May 2023

Key takeaway: The Michigan Consumer Survey, The Conference Board Consumer Survey and the NY Fed Survey of Consumer Expectations are the 3 most important surveys that are used to gauge strength, current views and future expectations of the US consumer with respect to a variety of factors including inflation, wages and spend. The Fed pays close attention to each of these 3 surveys to keep its fingers on the consumer’s pulse. After having jumped sharply in March, short term inflation expectations (one year ahead) fell back down from 4.7% to 4.4%. Generally, one year inflation expectations have trended down as the Fed has unflinchingly raised rates over the past 12 months. Median inflation expectations (3 years) have remained range bound at 2.8% – 2.9% and long term inflation expectations also remained range bound at 2.5 – 2.6%%. It is key to highlight that these range bound longer term inflation expectation numbers (in all the 3 surveys) have been one of the key reasons the Fed believes that inflation expectations are still well anchored. Median one year ahead wage growth also remained fairly range bound at 3.0%. This series has been moving in a narrow range of 2.8% to 3.0% since Sep 2021. Household spending growth expectations decreased to 5.2% in Apr from 5.7% in Mar. This indicator too has been trending down since hitting a peak of 9.0% in May 2022. Lastly, median home price growth expectations increased by 0.7% to 2.5% in Apr. While this is still below the past 12 month trailing average of 3.0% as well as pre-pandemic levels, the reading should be considered together with other current data observed in the US Residential Market. The housing market seems to have reached a bottom with significant activity in the new home sales market and rising prices seen in reports from private players in the Housing market. 

• NY Fed Survey US Consumer Inflation Expectations at 4.4% (Mar 2023 4.7%)

10th Apr 2023

Key takeaway: The Michigan Consumer Survey, The Conference Board Consumer Survey and the NY Fed Survey of Consumer Expectations are the 3 most important surveys that are used to gauge strength, current views and future expectations of the US consumer with respect to a variety of factors including inflation, wages and spend. The Fed pays close attention to each of these 3 surveys to keep its fingers on the consumer’s pulse. In a key development, short term inflation expectations (one year ahead) increased sharply according to the March NY Fed survey released in April. One year ahead inflation expectations increased 0.5% from 4.2% to 4.7%. This rate has trended down for the past 9 months since hitting a peak of 6.2% in July 2022. However, this was the first increase since Oct 2022. Median inflation expectations (3 years) remained range bound at 2.8% and long term inflation expectations also remained range bound at 2.5%. It is key to highlight that these range bound longer term inflation expectation numbers (in all the 3 surveys) have been one of the key reasons the Fed believes that inflation expectations are still well anchored. Median one year ahead wage growth also remained fairly range bound at 3.0%. This series has been moving in a narrow range of 2.8% to 3.0% since Sep 2021. Lastly, household spending growth expectations decreased to 5.7% in Mar from 5.6% in Feb. This indicator too has been trending down since hitting a peak of 9.0% in May 2022. Median home price growth expectations increased by 0.4% to 1.8% in Mar, still below the past 12 month trailing average of 3.0% as well as pre-pandemic levels.

• NY Fed Survey US Consumer Inflation Expectations at 4.7% (Feb 2023 4.2%)

13th Mar 2023

Key takeaway: The Michigan Consumer Survey, The Conference Board Consumer Survey and the NY Fed Survey of Consumer Expectations are the 3 most important surveys that are used to gauge strength, current views and future expectations of the US consumer with respect to a variety of factors including inflation, wages and spend. The Fed pays close attention to each of these 3 surveys to keep its fingers on the consumer’s pulse. In a key development, short term inflation expectations (one year ahead) decreased sharply according to the February NY Fed survey released in March. One year ahead inflation expectations fell 0.8% from 5.0% to 4.2%. This rate has trended down for the past 9 months since hitting a peak of 6.2% in July 2022. Median inflation expectations (3 years) remained range bound at 2.7% and long term inflation expectations also remained range bound at 2.6%. It is key to highlight that these range bound longer term inflation expectation numbers (in all the 3 surveys) have been one of the key reasons the Fed believes that inflation expectations are still well anchored. Median one year ahead wage growth also remained fairly range bound at 3.0%. This series has been moving in a narrow range of 2.8% to 3.0% since Sep 2021. Lastly, household spending growth expectations decreased to 5.6% in Feb from 5.7% in March. This indicator too has been trending down since hitting a peak of 9.0% in May 2022.

• NY Fed Survey US Consumer Inflation Expectations at 4.2% (Jan 2023 5.0%)