One-year inflation outlook rises to 6% in NY Fed consumer survey
WASHINGTON (BLOOMBERG) – Inflation expectations among United States consumers rose to a new high of 6 per cent for the coming year, according to the latest consumer survey of the Federal Reserve Bank of New York, after prices surged the most in decades in the country.
The survey also showed that the inflation outlook for three years declined for the first time since June, to 4 per cent, driven by respondents without a college degree.
However, the level of uncertainty about consumer price outcomes rose at both the short-term and long-term horizons, reaching fresh records in each case.
The results underscore the unpredictability of the recent surge that took the US central bank and most economists by surprise in recent weeks. The Fed will probably announce a faster pace of tapering at its meeting next week.
Consumers are less sanguine on the economy, the survey also shows. The mean probability that the US unemployment rate will be higher one year from now increased by 0.6 percentage point.
And perceptions about households’ current financial situations compared to a year ago deteriorated last month, with more respondents reporting being financially worse off.
The survey showed that Americans foresee faster price increases over the coming year for items like rent and food, which take up a big chunk of household spending and cannot easily be substituted. Expectations for gains in rent, food, college, medical care and fuel prices were all above 9 per cent.
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