American workers grew more confident in May even as their expectations for inflation declined, according to the Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations released Monday.
The perceived chance of voluntarily leaving a job in the next 12 months jumped 2.6 percentage points to 20.8 percent, the highest reading since February 2023. The increase was broad-based across age, education, and income groups.
Voluntary quit expectations are widely regarded as a measure of worker confidence because workers are typically more willing to leave the security of an existing job when they believe they have attractive alternatives. The New York Fed describes the measure as the “expected quit rate.”
At the same time, Americans’ expectations for inflation over the next year fell to 3.5 percent from 3.6 percent in April. Inflation expectations at the three-year and five-year horizons were unchanged at 3.1 percent and 3.0 percent, respectively. Disagreement among survey respondents about future inflation declined across all time horizons.
The survey presented mixed signals on the labor market. The perceived probability that the unemployment rate will be higher one year from now declined 0.4 percentage point to 43.2 percent. Median expectations for earnings growth were unchanged at 2.7 percent, slightly above the 12-month trailing average.
Other labor-market expectations were weaker. The perceived probability of losing one’s job in the next 12 months rose half a percentage point to 15.1 percent, above its 12-month trailing average of 14.4 percent. The perceived probability of finding a new job if one’s current job was lost fell 2.3 percentage points to 43.7 percent, the lowest reading since December 2025.
The weaker job-security and job-finding readings may in part reflect the fact that Federal Reserve officials have moved away from an easing bias, signaling that interest rates are unlikely to fall in the near term. Workers may also be anxious that artificial intelligence adoption in the workplace could displace them from their current jobs.
Household financial expectations were also mixed. Current credit access was largely unchanged, but fewer households expected credit conditions to become easier over the next year. The perceived probability of missing a minimum debt payment over the next three months rose to 12.6 percent, still slightly below its 12-month trailing average of 12.9 percent.
The shift in credit expectations is also consistent with a higher-for-longer interest-rate outlook. If consumers no longer expect the Federal Reserve to lower rates in the near term, they should also be less likely to expect borrowing conditions to become easier over the next year.
The survey was fielded from May 1 through May 31, before Friday’s Labor Department report showing that nonfarm payrolls rose by 172,000 in May and that revisions added 93,000 jobs to the prior two months’ totals. The unemployment rate held steady at 4.3 percent.
The NY Fed survey is based on a rotating panel of approximately 1,300 household heads and is conducted monthly by the bank’s Center for Microeconomic Data.
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