Consumers' optimism about job prospects dims in July

After two months of gradual improvement, consumers' expectations about their employment prospects slipped in July, the New York Fed's Center for Microeconomic Data finds in its July 2020 Survey of Consumer Expectations.

The mean perceived probability of losing one's job in the next year rose to 16.0% in July from 15.0% in June, above its 2019 average of 14.3% and its year-ago level of 13.8%.

Furthermore, the mean probability that the U.S. unemployment rate will be higher a year from now started increasing after three straight months of declines — to 39.3% in July vs. 35.1% in June, but down from a series high of 50.9% in March 2020.

Median expected household income growth held steady at 2.1% in July for the second consecutive month, which is well below its 2019 average of 2.8%.

Median household spending growth expectations rose 0.2 percentage point to 3.0% in July vs. 2.8% in June.

As for inflation, median inflation expectations increased at the one-year horizon to 2.9% in July vs. 2.7% in June and at the three-year horizon to 2.7% in July from 2.5% in June.