New York, October 12, 2025
News Summary
A recent report from the Federal Reserve Bank of New York highlights increasing worries among Americans regarding job market conditions. The September survey revealed heightened unemployment expectations and a rise in short-term inflation concerns. While respondents perceived a greater likelihood of job loss in the coming year, they also believed they could find new work within three months if displaced. Despite mixed views on current financial situations, households showed optimism about their short-term ability to navigate employment changes.
New York — Americans showed heightened concern regarding future job market conditions in September, according to a report from the Federal Reserve Bank of New York that found rising unemployment expectations and increased short-term inflation worries.
Top takeaways
The September New York Fed survey found that respondents perceived a higher probability of job loss over the next year while also reporting a better short-term ability to find new work if displaced. The survey showed an increase in one-year inflation expectations and steady longer-run inflation expectations, and households reported mixed views on current and future finances.
Key findings from the September survey
- Americans showed heightened concern regarding future job market conditions in September.
- The Federal Reserve Bank of New York released a report indicating a rise in unemployment expectations compared to August.
- Respondents perceived a higher probability of job loss over the next year.
- There is a belief among respondents of improved chances to find new employment within three months in case of job loss.
- Households reported a more favorable view of their current financial situations but slightly downgraded their future financial outlook.
- Future spending expectations decreased among households, reflecting mixed perceptions of future earnings and income levels.
- Expected inflation for one year ahead increased to 3.4% from 3.2% in August.
- Three-year-ahead expected inflation remained steady at 3%.
- Five-year-ahead expected inflation also held at 3%, slightly up from 2.9% the previous month.
- The Federal Reserve’s target inflation rate is 2%, and actual inflation has been above this target for several years.
- Year-ahead food price expectations reached their highest level since March 2023.
- The report was based on survey responses from September, prior to the government shutdown.
Supporting details and context
The New York Fed’s September survey captured household sentiment before a subsequent government shutdown that has limited the availability of more recent economic data and delayed official releases, including the September employment report. The timing means the survey reflects conditions and expectations formed prior to the immediate effects of the shutdown.
Alongside rising short-term inflation expectations, the survey showed that households felt their current finances had improved, even as their outlook for future finances dimmed slightly. Households also reported lower future spending expectations, which could weigh on consumer-driven economic activity if sustained.
On labor-market details, the survey indicated higher unemployment expectations compared to August and that respondents perceived a greater likelihood of losing a job in the coming year. At the same time, many respondents indicated a belief that they could find new employment within three months if they were to lose a job, suggesting some confidence in job-search prospects despite rising concerns.
Monetary policy and economic implications
The Fed reduced its overnight target rate range by 0.25 percentage points last month to between 4% and 4.25%. Analysts expect additional rate cuts as a result of weak hiring data, with predictions totaling 50 basis points of cuts before the end of the year. Central bankers face the challenge of balancing efforts to control inflation that has been above the Fed’s 2% target for several years while also responding to signs the job market is weakening.
New York Fed leadership highlighted the need to weigh these trade-offs when setting policy. Boston Fed leadership noted that while further rate cuts are possible, they should be approached cautiously to limit the risk of reigniting inflation. The survey and current data limitations complicate decisions for Fed officials as they attempt to guide policy through an environment of stubborn inflation and emerging labor-market weakness.
What this means for households and markets
Rising one-year inflation expectations and higher year-ahead food price expectations may influence household budgets and spending decisions. At the same time, elevated unemployment expectations could affect consumer confidence. If households reduce spending in response, the slowdown could feed into softer hiring and economic activity, which is consistent with some analysts’ expectations of future rate cuts.
Background
The Federal Reserve Bank of New York conducts periodic surveys to gauge household expectations on inflation, employment prospects, and financial conditions. These surveys are used to inform broader assessments of economic sentiment and can influence the policy discussion within the Federal Reserve System.
Frequently Asked Questions
What did the New York Fed report find?
Americans showed heightened concern regarding future job market conditions in September.
Did unemployment expectations change?
The Federal Reserve Bank of New York released a report indicating a rise in unemployment expectations compared to August.
Are people worried about losing their jobs?
Respondents perceived a higher probability of job loss over the next year.
If people lose jobs, can they find new work quickly?
There is a belief among respondents of improved chances to find new employment within three months in case of job loss.
How do households feel about their finances?
Households reported a more favorable view of their current financial situations but slightly downgraded their future financial outlook.
What about spending and inflation expectations?
Future spending expectations decreased among households, reflecting mixed perceptions of future earnings and income levels.
Expected inflation for one year ahead increased to 3.4% from 3.2% in August.
Three-year-ahead expected inflation remained steady at 3%.
Five-year-ahead expected inflation also held at 3%, slightly up from 2.9% the previous month.
How does this compare to the Fed’s target?
The Federal Reserve’s target inflation rate is 2%, and actual inflation has been above this target for several years.
Are food prices a concern?
Year-ahead food price expectations reached their highest level since March 2023.
When was the survey conducted?
The report was based on survey responses from September, prior to the government shutdown.
Quick reference table
| Measure | Value / Note |
|---|---|
| One-year expected inflation | 3.4% (up from 3.2% in August) |
| Three-year expected inflation | 3% |
| Five-year expected inflation | 3% (slightly up from 2.9%) |
| Federal Reserve target inflation | 2% |
| Fed overnight target rate range (current) | 4% to 4.25% (cut by 0.25 percentage points last month) |
| Analysts’ expected rate cuts | 50 basis points of cuts before year-end (projection) |
| Survey timing | Responses from September, prior to the government shutdown |
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Additional Resources
- Reuters
- Wikipedia: Inflation
- New York Times
- Google Search: Federal Reserve
- Barron’s
- Encyclopedia Britannica: Economic Inflation
- US News
- Google News: Job Market Outlook
- Mortgage Professional America
- Google Scholar: New York Fed Survey
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