Americans Brace for Higher Unemployment and Inflation Amid Rising Economic Uncertainty
Americans’ fear of rising unemployment is at its highest level since April 2020, according to the Federal Reserve Bank of New York’s March Survey of Consumer Expectations.
- Respondents placed a 44% probability on the national unemployment rate being higher one year from now — the highest reading in nearly four years.
- Job security concerns are climbing, with the average perceived chance of losing one’s job rising to 15.7%, a 12-month high.
- The New York Fed survey contributes to a broader pattern of consumer pessimism, fueled by political uncertainty and recession fears.
- Despite these soft sentiment indicators, hard data continues to show economic resilience, including steady job growth and solid consumer spending through March.
- Economists warn that persistent negative sentiment could impact future economic performance, as lower consumer confidence might lead to reduced spending and business investment.
- Short-term inflation expectations rose sharply, climbing to 3.6%, the highest level since late 2022.
- President Trump’s aggressive tariff policies and ongoing trade disputes are being blamed for possible upward pressure on consumer prices.
- However, long-term inflation expectations remain stable, with 3-year outlooks holding at 3% and 5-year projections dipping slightly to 2.9%.
- The Fed monitors inflation expectations closely, as they can influence actual behavior — such as wage demands and spending — that may drive prices up further.
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