Consumers more worried about personal finances and jobs, New York Fed report shows

Key Points:

• U.S. consumers’ inflation expectations remained steady in August, with projections of 3.6% inflation one year ahead and 3% five years ahead, according to the New York Federal Reserve’s Survey of Consumer Expectations.
• Despite stable inflation outlooks, households expressed increased concerns about the job market, with unemployment rate expectations rising to the highest level since April 2020.
• Respondents lowered their assessments of current and future personal financial situations and credit access, while expectations of losing a job declined but confidence in finding new work also weakened.
• The Federal Reserve is preparing for its September 15-16 policy meeting amid uncertainty over interest rate decisions, with the upcoming Consumer Price Index report for August seen as a key factor influencing policy direction.
• Fed officials remain divided, with some signaling readiness to hike rates to combat inflation, while others, like Fed Governor Christopher Waller, are open to holding rates steady if inflation shows continued progress toward the 2% target.