American consumers are feeling slightly more confident about inflation, according to a Fed survey released Tuesday.
Data from the Federal Reserve Bank of New York’s June 2025 Survey of Consumer Expectations show that short-term inflation expectations dipped to 3.0%, down 0.2 percentage points from the previous month — and the same rate recorded in January before the tariffs spiked consumer anxiety. Expectations for inflation over the next three and five years remained unchanged, at 3.0% and 2.6% respectively.
“The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) decreased at all horizons,” the Fed said, signaling growing consensus that inflation is stabilizing. Uncertainty around future inflation also declined, particularly in the short term.
Consumers reported greater optimism about their financial outlook to the Fed. A smaller share of households said their financial situation had worsened over the past year, and more said they expected things to improve in the year ahead.
Income expectations ticked up slightly, with the median household anticipating 2.9% growth in the next year, matching the 12-month average. At the same time, households expected to spend a bit less, with median spending growth expectations slipping to 4.8%, down 0.2%.
The labor market outlook also brightened. The perceived probability of losing one’s job fell to 14.0%, the lowest since December 2024, and unemployment expectations dropped by more than a full percentage point.
Households reported fewer difficulties accessing credit compared to last year, and expectations for future access also improved. Meanwhile, the average perceived likelihood of missing a minimum debt payment in the next three months dropped 1.4% to 12.0%, the lowest since May 2024.
The survey, which is nationally representative and internet-based, features a rotating panel of around 1,300 heads of household that report their answers to the Fed for up to a year.