More US households anticipate they’ll be financially worse off in the year ahead as gas and food prices creep higher, according to the New York Federal Reserve’s March survey of consumer expectations.
Across the board, consumers’ feelings soured last month as the US-Israel war on Iran began to rip through the global economy and sent gas prices above $4 per gallon. Near-term inflation expectations rose, the outlook for earnings growth slid a tad, and fears that the unemployment rate will worsen in the next year hit the highest level since last April, when President Trump’s “Liberation Day” tariffs rattled markets.
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Put simply, there’s little consumers are feeling good about.
“Year-ahead expectations about households’ financial situations also deteriorated, with a larger share of households expecting a worse financial situation (the highest since April 2025) and a smaller share of households expecting a better financial situation in one year from now,” the New York Fed said in a statement Tuesday.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
Expectations for gas prices, in particular, are smarting: Consumers see fuel costs rising by 9.4% in the year ahead. That would make them more conservative than some analysts who anticipate gas could hit $5 per gallon if the Strait of Hormuz remains closed, as prices are already averaging $4.14.
The University of Michigan’s survey of consumers also showed Americans’ mood slumped last month, with year-ahead inflation expectations notching the largest one-month increase since April 2025. Consumer confidence, as measured by the Conference Board, however, unexpectedly rose in March.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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