New York, Sept. 12 (BUS): Inflation expectations for US consumers eased further in August as gasoline prices continued to slide sharply from a record high in June, a development likely to be welcomed by federal policy makers weighing the scale of rate hikes. next week.
The New York Federal Reserve’s monthly consumer expectations survey on Monday showed that consumers in August saw inflation at 5.75% over the next 12 months, down from 6.2% in July and the lowest rate since October 2021. They also expected price increases to average 2.8 % over the next three years — the lowest pace since late 2020 — after pegging inflation over that horizon at 3.2% in July, Reuters reported.
These results may bring some relief to US central bank officials who have been concerned that the highest rate of inflation in 40 years may alter consumers’ perceptions of how persistent price shocks are, making the task of policy makers in containing inflation more difficult. .
The Federal Open Market Committee – the policy-making arm of the Federal Reserve – at its September 20-21 meeting is expected to raise the central bank’s key lending rate again from the current range of 2.25%-2.50%. The Fed raised interest rates by 75 basis points, and contracts in the futures markets linked to Fed expectations expect a third increase of this size next week.
The survey also brought some upbeat news to the labor market, which Fed officials expect to weaken somewhat as they raise interest rates to reduce overall activity and demand.
Consumers who responded to the New York Federal Reserve’s August survey saw less likelihood of losing their jobs next year than in July and more likely to find a new job if they lost their current one. Moreover, the percentage of those who think they are likely to quit their current jobs has fallen to the lowest level since March 2021.
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