Meanwhile, home price growth expectations remained unchanged at 3.0% for the fourth straight month, offering a measure of stability for the mortgage sector.
The Commerce Department’s August data indicated that the core personal consumption expenditures (PCE) price index—excluding volatile food and energy—rose 0.2% for the month, matching forecasts and July’s pace. The headline PCE index, which includes all items, posted a 0.3% monthly gain, nudging the annual inflation rate to 2.7%.
Labor market anxieties, however, intensified. The mean probability that the US unemployment rate will be higher in a year rose to 41.1%, and the perceived risk of losing one’s job ticked up to 14.9%.
“Labor market expectations continued to deteriorate with consumers reporting lower expected earnings growth, greater likelihoods of losing jobs, and a higher likelihood of a rise in overall unemployment,” the NY Fed said.
Median one-year-ahead earnings growth expectations slipped to 2.4%, the lowest since April 2021.