Consumer concerns spiked in March, with worries about inflation, unemployment, and the stock market reaching their highest levels since the early days of the pandemic.
The Federal Reserve Bank of New York’s latest Survey of Consumer Expectations paints a stark picture of growing anxiety.
Respondents foresee inflation at 3.6% one year from now, marking a half-point increase from February.
This is the highest inflation projection since October 2023. Along with rising prices, concerns about the labor market have surged.
The probability of higher unemployment a year from now jumped to 44%, a sharp 4.6-point increase, the steepest since April 2020, when Covid sent shockwaves through the economy.
This financial unease is spilling over into stock market expectations. Only 33.8% of respondents expect the market to be higher in a year—a 3.2-point drop to its lowest since June 2022. Meanwhile, the outlook for gold shines brighter.
Survey participants predict a 5.2% rise in gold prices, the most optimistic forecast since April 2022.
This survey, conducted before President Trump’s tariff announcement on April 2, mirrors broader fears about the impact of tariffs.
Even as traders show relatively low inflation worries, the survey highlights that the public remains deeply concerned about rising prices, especially for everyday goods.
The outlook for food prices rose to 5.2%, the highest since May 2024, while rent expectations increased to 7.2%, and medical care costs are expected to climb 7.9%, marking the highest forecast since August 2024.
On a slightly positive note, gasoline price expectations dropped to 3.2%, a 0.5-point dip from February’s outlook.
The survey paints a picture of a population on edge, with inflation, unemployment, and market volatility all factoring heavily into future expectations.
This could impact business decisions moving forward, as companies and individuals navigate an uncertain economic landscape.
It remains to be seen whether these concerns will prompt broader economic shifts or if they will dissipate as the year progresses.
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