The latest Federal Reserve Bank of New York’s July 2025 Survey of Consumer Expectations highlights how consumer optimism grows, with households showing greater confidence in their financial outlook even amid modestly rising inflation expectations.
The July 2025 Survey of Consumer Expectations, released August 7 by the New York Fed, shows that median inflation expectations increased to 3.1 percent from 3.0 percent for the year ahead. Expectations over the five-year horizon rose to 2.9 percent from 2.6 percent, while three-year projections held steady at 3 percent. Despite this uptick, inflation uncertainty fell at both the one- and three-year horizons (New York Fed).
Taxes And Home-Price Outlook Stay Bright
Consumers expressed relief over tax expectations, with the median anticipated tax-growth dipping to 2.9 percent—the lowest since October 2020, reflecting favorable views on the newly enacted tax law. Meanwhile, home-price growth projections remained solid, unchanged at positive 3 percent.
Household Finances Improve, Credit Expectations Rise
Consumers reported greater optimism about their current and future financial standings. Fewer households said they were worse off than a year ago, and fewer expected to be worse off in a year. Expectations for easier credit access in the year ahead also improved, signaling stronger confidence in household resilience (Survey of Consumer Expectations).
Mixed Labor-Market Signals Show Balance
The labor-market outlook was mixed: expectations of a higher unemployment rate in a year fell to levels not seen since January, while the perceived likelihood of losing one’s job in the next 12 months edged up slightly. This nuanced view suggests cautious optimism among workers.
All told, the July survey suggests consumer optimism grows in small but meaningful ways—taxes seem more manageable, home-price expectations remain steady, and financial sentiment is improving. For Mid Valley residents, this may signal a moment to breathe easier, plan with more confidence, and keep an eye on evolving economic trends.
