By David Barwick – FRANKFURT (Econostream) – Eurozone consumers’ inflation expectations rose in March, including at the three-year horizon, while growth expectations worsened and expected unemployment increased, the European Central Bank said in its latest Consumer Expectations Survey, released Tuesday.

Median expectations for inflation over the next 12 months rose to 4.0% from 2.5% in February, while expectations for inflation three years ahead increased to 3.0% from 2.5%.

Five-year inflation expectations rose more modestly, to 2.4% from 2.3%.

Consumers’ median perception of inflation over the previous 12 months increased to 3.5% from 3.0%, while uncertainty about inflation expectations over the next year also rose.

The ECB said lower-income respondents continued to report slightly higher inflation perceptions and short-horizon expectations than higher-income respondents, though inflation perceptions and expectations rose across all income groups in March.

Younger respondents, aged 18 to 34, continued to report lower inflation perceptions and expectations than older respondents.

Nominal income growth expectations for the next 12 months were unchanged at 1.2%.

Perceived nominal spending growth over the previous 12 months rose to 5.1% from 4.6%, while expected nominal spending growth over the next 12 months increased to 4.1% from 3.5%, the highest level since May 2023.

Economic growth expectations for the next 12 months deteriorated to -2.1% from -0.9%.

Consumers’ expected unemployment rate 12 months ahead rose to 11.3% from 10.8%. Lower-income households expected the highest unemployment rate, at 13.7%, while higher-income households expected the lowest, at 9.7%.

Consumers continued to expect future unemployment to be slightly above their perceived current unemployment rate of 10.6%, which the ECB said suggested a broadly stable labor market outlook.

Expected growth in home prices over the next 12 months increased to 3.7% from 3.6%.

Mortgage interest rate expectations for the next 12 months rose to 4.9% from 4.7%. Lower-income households expected the highest mortgage rates, at 5.5%, while higher-income households expected the lowest, at 4.3%.

The net share of households reporting tighter access to credit over the previous 12 months increased to its highest level since April 2024.

The net share expecting tighter credit conditions over the next 12 months rose to its highest level since January 2024.

The ECB said the release of the April Consumer Expectations Survey results is scheduled for June 1.