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US consumers are becoming more worried about inflation, with expectations for price increases over the next year reaching their highest level in more than three years. The Federal Reserve Bank of New York’s September Survey of Consumer Expectations, released on Wednesday (October 7, 2026), showed that one-year inflation expectations rose to 3.9% from 3.6% in August. It was the highest reading since May 2023, adding to concerns about the outlook for consumer prices.
The latest reading comes as households continue to face higher expected costs for essentials including food, gasoline, rent and medical care. The increase also highlights the challenge facing the Federal Reserve as it weighs interest-rate policy against signs of a changing economic outlook.
The survey showed that expectations for several household expenses increased in September. Consumers now expect gasoline prices to rise 4.8% over the next year, while food prices are expected to increase 5.5%. Expected rent growth rose to 6.8%, while medical-care costs are projected to climb 9.2%. Expectations for college tuition increased sharply to 7.5%.
The rise in expectations suggests households are becoming less confident that inflation will continue moving toward the Federal Reserve’s 2% target. The survey also found that inflation uncertainty increased over the one- and three-year horizons.
While short-term concerns increased, consumers did not significantly change their longer-term view of inflation. Three-year inflation expectations rose slightly to 3.3%, from 3.2%, while five-year expectations remained unchanged at 3%.
That distinction matters for policymakers since persistent increases in longer-term expectations can make it harder for a central bank to bring inflation down. For now, the latest survey suggests the increase in price concerns is concentrated more heavily in the near term.
The survey showed that households expect to spend more over the next year. Median one-year-ahead nominal household spending growth expectations increased to 5.5%, up from 5.2% in August and the highest level since May 2023.
Expected household income growth also edged higher to 3.1%, its strongest reading since February 2025. However, consumers reported a weaker view of their overall financial situation, with more respondents saying they were worse off than a year ago or expected their finances to deteriorate.
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The latest figures give policymakers another indicator to watch as they assess the path for interest rates. Higher inflation expectations do not necessarily mean consumer prices will rise by the same amount, but they can influence spending and wage decisions.
The New York Fed survey also showed some improvement in labor-market expectations, including a lower perceived probability of losing a job. Still, rising inflation and spending expectations could complicate the Fed’s efforts to keep price pressures under control while supporting economic growth.
