NY Fed: Inflation expectations drop and spending growth expectations remain low

The May 2017 Survey of Consumer Expectations shows that household inflation expectations declined at the one-year ahead horizon and dropped noticeably at the three-year ahead the horizon, said the Federal Reserve Bank of New York on Monday.

Key quotes:

• Median one-year ahead inflation expectations decreased from 2.8% in April to 2.6%. Median three-year ahead inflation expectations dropped from 2.9% in April to 2.5%, their lowest reading since January 2016.
• Median year-ahead home price change expectations continued their upward trend, reaching 3.5%, up from 3.4% in April and 3.1% in February this year.
• Median one-year ahead earnings growth expectations decreased from 2.5% in April to 2.2%. This series has been oscillating between 2% and 2.5% since late-2015.
• Median expected household income growth was largely unchanged from the previous month, at 2.7%.  Median household spending growth expectations remained at 2.6%, the series low reached in April.