Perceived inflation rises, long-term expectations fall

The median perceived inflation over the past twelve months increased significantly in April to 4.0 percent, up from 3.5 percent in March.

Concurrently, the median inflation expectations for the next twelve months remained unchanged at 4.0 percent.

However, longer-term expectations showed some easing, with the median for three-year inflation expectations decreasing slightly to 2.9 percent from 3.0 percent.

Five-year inflation expectations remained stable at 2.4 percent.

Uncertainty surrounding twelve-month inflation expectations persisted at an elevated level.

The survey also revealed that inflation perceptions and expectations among consumers in lower income quintiles continued to be somewhat higher than those in upper income quintiles, and lower among younger respondents (18-34 years) compared to older age groups.

Expectations for nominal income growth over the next twelve months declined to 0.8 percent, while nominal expenditure growth expectations rose to 4.3 percent.

Economic growth expectations became more negative, reaching -2.2 percent.

Conversely, unemployment rate expectations decreased to 11.2 percent, suggesting a largely stable labor market outlook.

Housing price increase expectations remained unchanged at 3.7 percent, with mortgage rate expectations also stable at 4.9 percent.

The survey highlighted a significant tightening in credit access, with the net share of households reporting stricter access over the past twelve months reaching its highest level since February 2024.

Expectations for future tightening also increased, and the share of consumers applying for credit fell to its lowest since April 2023.