U.S. consumers’ near-term inflation expectations inched higher in April, while the long-term price outlook remained stable, according to a Federal Reserve Bank of New York survey.

U.S. consumers said they see inflation of 3.6% over the next year, up from 3.4% in March, according to the median response in the New York Fed’s monthly Survey of Consumer Expectations, released Thursday. Expectations for inflation in three years and five years were unchanged at 3.1% and 3%, respectively.

The report shows that consumers foresee more price increases after the U.S.-Israel war with Iran sparked an oil shock that sent fuel costs surging, straining household budgets and dinging consumer sentiment. U.S. gasoline prices surpassed $4.50 a gallon this week for the first time since July 2022, according to the American Automobile Association.

Still, consumers in the survey see the pace of gasoline price growth abating. They expect a 5.1% increase in the coming year, down from 9.4% in March. A separate study from the New York Fed found that low-income households are disproportionately affected by higher fuel prices.

Americans continue to feel more pessimistic about their finances, the survey showed. A larger share of consumers said their current financial situation was worse than a year ago, and a smaller share said their conditions had improved.

Consumers also expect it will become more challenging to borrow money. A higher percentage of people said it is harder to tap credit now than it was a year ago, and a larger share said they expect it to get more difficult in the future.

On the labor market, the chance that the unemployment rate will be higher in one year rose by 0.4 percentage points to 43.9%, the highest in a year. The perceived odds of becoming unemployed in the next year also increased by 0.2 percentage point to 14.6%.

But the expected odds of finding a new job after becoming unemployed increased slightly. U.S. companies boosted payrolls last month by the most in over a year, based on ADP Research data out this week. The April employment report from the Labor Department is due Friday.

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