Consumer expectations for US inflation in one year’s time declined slightly in the latest survey by the Federal Reserve Bank of New York.
(Bloomberg) — Consumer expectations for US inflation in one year’s time declined slightly in the latest survey by the Federal Reserve Bank of New York.
Median one-year-ahead inflation expectations declined by 0.2 percentage point to 5% in December, its lowest reading since July 2021. Expectations for inflation three years ahead were unchanged at 3%, according to the New York Fed’s Survey of Consumer Expectations.
Longer-term inflation expectations edged up slightly, driven by higher price expectations from younger respondents. Median five-year-ahead inflation expectations increased by 0.1 percentage point to 2.4%.
US year-ahead inflation expectations for some of the most commonly used goods — gasoline and food — declined by 0.7 percentage point. One-year ahead food price expectations slowed to 7.6%.
Relief at the Pump
The drop in gasoline prices over recent weeks played a big part in easing household concerns. The New York Fed survey found that consumers now expect gasoline to rise by 4.1% over the coming year, down from 10% in March. The national average price of regular gasoline is down to $3.28 from over $5 last June.
The Labor Department will release the December reading of the consumer price index on Thursday. Economists polled by Bloomberg expect month-on-month CPI to be unchanged while the annual rate is seen continuing to cool.
Expectations for rental-price increases in the coming year fell to a 21-month low of 9.6%, according to the New York Fed. Its online poll is based on a rotating sample of about 1,300 households.
A separate survey by Fannie Mae, also released Monday, estimates that rents will rise 5.5% over the period, while home prices are expected to fall by 1.6%. It’s the fifth consecutive month respondents say home prices will fall in the year ahead.
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