EL7.AI
Macro EconomyMedium•9 November 2026•
3 min read

New York Fed Survey Holds Inflation Expectations at 3.9% as Unemployment Concerns Mount

Key Facts

1Inflation expectations remained above the Federal Reserve’s 2% target and at levels similar to the September survey.
2Expectations for a rise in the unemployment rate over the coming year reached their highest level since April 2020.
3Employers added 165,000 jobs in October, and the unemployment rate stood at 4.1%.
4Economists forecast October annual inflation at 3.9%, compared with 3.7% in September.

The New York Federal Reserve’s October survey showed inflation expectations steady at 3.9% for one year, 3.3% for three years and 3.0% for five years. Reuters said expectations for price increases remained at levels similar to the September survey, but above the Federal Reserve’s 2% target. The results offer a mixed picture of household expectations: a steady outlook for inflation, alongside growing concern about the labor market. Expectations for a rise in the unemployment rate over the coming year reached their highest level since April 2020, according to Reuters’ report on the survey. That reflects concerns about the future state of the labor market, while the measure is not equivalent to an individual’s likelihood of losing their job.

In the September survey, one-year inflation expectations rose to 3.9% from 3.6% in August, their highest level since May 2023, Reuters reported. Three-year inflation expectations also reached 3.3% in September, compared with 3.2% in August, while five-year expectations held steady at 3.0%. In August, one-year inflation expectations stood at 3.6% and five-year expectations at 3.0%, while three-year expectations fell to 3.2% from 3.3% in July. The sequence of readings shows the one-year outlook rose in September before stabilizing in October, while the five-year reading was unchanged between August and October. Those expectations remain above the 2% inflation target, Reuters said.

Concerns about future unemployment intersect with data reported by Reuters showing that the U.S. economy added 165,000 jobs in October and the unemployment rate fell to 4.1%. The Associated Press said employers added the same number of jobs during the month and that the labor market showed signs of strain despite its resilience. The agency said finding a job had become harder for those who lose their work. Against the backdrop of the September survey, Minneapolis Federal Reserve President Neel Kashkari said price pressures were weighing on consumer sentiment and linked an improvement to inflation returning to 2%. Reuters quoted him as saying: "When we get inflation back to 2% and people no longer have to worry about it getting worse."

Attention now turns to the U.S. consumer price index for October, scheduled for release on November 10, according to the Bureau of Labor Statistics calendar. Ahead of its release, economists cited by the Associated Press forecast annual inflation rising to 3.9% from 3.7% in September. The report added that annual inflation has exceeded 3% since March. The upcoming reading takes on added significance as inflation expectations for the coming years remain above the Federal Reserve’s target and concern about the path of unemployment grows. In the context of monetary policy expectations, Reuters said Federal Reserve officials are widely expected to raise interest rates at the early December policy meeting to bring inflation back to target.