U.S. consumers expect that college costs will increase almost as much as health care costs over the coming year, both rising at roughly three times the median rate for overall inflation.
According to the latest New York Fed Survey of Consumer Expectations, the median cost of college is expected to rise 7.2% while health care costs jump 7.8% and overall inflation increases just 2.6%.
Even this moderate growth in overall inflation expectations, which is the lowest reading since late 2017, isn’t as positive as it seems.
Consumers expect their median earnings will grow just 2.4% over the coming year, down from 2.6% in April. The biggest decline in expectations for median earnings came from households with incomes below $50,000.
Median expected household income growth, however, is seen rising 2.9%, up from 2.8% in the March survey, but equal to the expected median increase in taxes for current income levels.
“Larger shares of respondents [are] expecting to be and feeling better off financially,” according to the report summary.