(Reuters) - U.S. consumers in October grew more confident about inflation continuing to ease and in the health of the job market, and for the first time in five months they saw a lower risk of defaulting on their debt, a survey from the Federal Reserve Bank of New York showed on Tuesday.

Households on average saw inflation over the next year at 2.9%, down from 3.0% in September and the lowest estimate for near-term price increases in four years, according to the New York Fed's monthly Survey of Consumer Expectations. Inflation expectations also fell at the three-year and five-year horizons - to 2.5% and 2.8%, respectively.

Those are findings likely to be welcomed by the Fed as it works to keep price pressures contained and inflation expectations anchored while it continues its policy shift to interest rate decreases. The Fed has cut interest rates twice since September, including a quarter-percentage-point reduction last week, although the outlook for just how far rates will drop has become more muted following last week's victory by Donald Trump in the U.S. presidential election given expectations for him to quickly pursue stimulative tax reforms and other pro-growth policies.

Inflation by the measure used by the Fed to set its 2% target for annual price increases fell in September to 2.1%, its lowest since February 2021, and it has now tumbled by more than 5 percentage points from 40-year highs in mid-2022. The lingering high prices from that episode have remained a weight on consumer sentiment, however, and that contributed to Trump's victory over Democratic Vice President Kamala Harris.

The survey also showed improved attitudes about the job market and household credit conditions.

The perceived probability that the jobless rate would be higher a year from now fell to 34.5%, its lowest since February 2022, and consumers estimated the likelihood of losing their own job over the next 12 months at 13%, the lowest since January. Meanwhile, the estimated probability of finding a new job in the event of a job loss improved to 56%, the highest in a year, with the 3.3 percentage point increase from September being the largest since May 2021.

The U.S. unemployment rate at 4.1% in October remained at a historically low level, although the pace of job creation has slowed in the last year.

With interest rates falling, price growth abating and expectations for continued buoyancy in the job market, consumers' estimated risk of falling into default on their debt improved for the first time since May. The estimated probability of missing a minimum monthly debt payment in the next year fell to 13.9%, easing from its highest level since May 2020 in September. Perceptions of credit access also improved, the survey showed.