01:47 PM EDT, 09/09/2024 (MT Newswires) -- US consumers' inflation expectations rebounded at the medium-term horizon in August, while the labor market outlook was "mixed, but largely stable," the Federal Reserve Bank of New York said Monday.

Median one- and five-year inflation expectations were flat at 3% and 2.8%, respectively, last month, while the three-year outlook rose to 2.5% from 2.3%, according to the regional Fed's Survey of Consumer Expectations. Year-ahead inflation expectations increased for gas, rent and medical care, but decreased for food and the cost of college education.

Median home price growth expectations moved up to 3.1% in August from 3% the month prior, the Fed branch said.

Government data are likely to show Wednesday that US consumer inflation rose 0.2% sequentially and 2.6% annually last month, according to a Bloomberg-compiled consensus. The official producer prices report for August is scheduled to be released Thursday.

Median one-year earnings growth expectations rose to 2.9% in August from 2.7% the month prior, while mean unemployment projections advanced to 37.7% from 36.6%. The mean perceived probability of losing one's job in the next 12 months dropped by one percentage point to 13.3%, while the odds of leaving one's job voluntarily fell to 19.1% from 20.7%. The mean perceived probability of finding a new job dropped by 0.2 percentage point to 52.3%, according to the New York Fed survey.

On Friday, official data showed the US economy added fewer jobs than expected in August, while the unemployment rate ticked down.

New York Fed President John Williams said Friday it is now "appropriate" for the central bank's Federal Open Market Committee to start easing monetary policy, while Governor Christopher Waller separately said the same day it is "important" to begin the easing process later this month. Last month, Fed Chair Jerome Powell said the "time has come" to start cutting interest rates, though the timing and extent of policy easing will depend on incoming data.

"A weaker-than-expected rise in topline hiring coupled with no further upward momentum in inflation last month seemingly solidifies the Fed's commitment to a first-round rate cut later this month," Stifel Chief Economist Lindsey Piegza and Economist Lauren Henderson said in a Monday note to clients. "However, the lack of meaningful downward momentum in price pressures coupled with a downtick in the unemployment rate and stronger wage gains seemingly removes the necessity of a more aggressive policy response in terms of either a larger rate reduction or more expedited pathway."

The odds of a 25-basis-point interest rate cut next week rose to 73% Monday from 70% Friday, while the probability of a more aggressive 50-basis-point reduction fell to 27% from 30%, according to the CME FedWatch tool.

Median expected growth in household income rose by 0.1 percentage point to 3.1% last month, while the household spending growth outlook advanced by 0.1 percentage point to 5%, the New York Fed survey showed.