(Bloomberg) -- US consumers’ near-term inflation expectations declined in December to the lowest level since January 2021, according to a Federal Reserve Bank of New York survey released Monday.

Median year-ahead inflation expectations fell for a third month to 3.0%, down from 3.4% in November. Expectations for price growth at the three-year and five-year horizon also declined to 2.6% and 2.5%, respectively.

The easing in Americans’ inflation views reflected a pullback in the expected price changes for food and rent. The cost of college is anticipated to climb at a faster rate, while forecasts for gasoline prices and medical care stabilized. 

Expected year-ahead earnings growth also slowed, falling to the lowest level since April 2021. The decline was driven by respondents with a high school diploma or less, the New York Fed said. People earning less than $50,000 expect 1% income growth, while those earning $100,000 or more expect 3%.

Despite the pullback in expected earnings growth, respondents were more upbeat about the jobs market. The perceived probability of losing one’s job fell, and more consumers anticipate the unemployment rate will be lower one year from now. 

A larger share of respondents also expect looser credit conditions in the coming year.

The Federal Reserve is widely expected to cut interest rates this year, following a substantial retreat in inflation. Policymakers anticipate reducing the benchmark lending rate by 75 basis points in 2024, according to the group’s median projection. 

Read More: Fed Pivot Will Dominate Year of Rate Cuts in Turn of World Cycle

Updated statistics on consumer inflation will be released later this week. 

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