Consumers expressed more pessimism about their year-ahead financial situations in February as unemployment, debt delinquency and credit access expectations deteriorated notably, according to a report released March 10 by the Federal Reserve Bank of New York’s Center for Microeconomic Data.

The mean perceived probability of losing one’s job in the next 12 months edged down 0.1 percentage point from the previous month to 14.1% in the previous month.

However, the February 2025 Survey of Consumer Expectations report also noted the mean probability of leaving one’s job voluntarily (expected quit rate) in the next 12 months also fell, decreasing by 2.3 percentage points to 17.6%, its lowest reading since July 2023. The decrease in the expected quit rate was broad-based across education and income groups.

In addition, the mean perceived probability of finding a job in the next three months if one’s current job was lost fell 0.3 percentage point to 51.2%, remaining below its trailing 12-month average of 52.5% and below its February 2020 pre-pandemic level of 58.7%.

Other employment findings:

• Median one-year-ahead expected earnings growth was unchanged at 3.0% in February. The series has been moving within a narrow  2.7% to 3.0% range since January 2024.
• Mean unemployment expectations — or the mean probability that the US unemployment rate will be higher one year from now — jumped 5.4 percentage points to 39.4%, its highest reading since September 2023. The increase was broad-based across age, education and income groups.

Inflation Outlook

The report also asked consumers about other topics, including inflation, where expectations increased slightly for the short term but remained unchanged for the medium- and longer-term horizons.

Median inflation expectations increased by 0.1 percentage point to 3.1% at the one-year horizon and were unchanged at 3.0% at the three-year- and five-year-ahead horizons.

Perceptions about households’ current financial situations compared to a year ago were mostly unchanged, but the report also found consumers’ year-ahead expectations about their households’ financial situations deteriorated considerably in February. The share of households expecting a worse financial situation one year from now rose to 27.4%, its highest level since November 2023.

Expectations for future credit availability also deteriorated considerably in February, with the share of respondents expecting it will be harder to obtain credit a year from now at 46.7%, up from 35.6% and the highest reading since June 2024.

In addition, the average perceived probability of missing a minimum debt payment over the next three months increased by 1.3 percentage points to 14.6%, the highest level since April 2020. The increase was driven by those without a college degree and was largest for those under age 40.

The survey is based on a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads.