Sheets customers receive gas at a gas station in Plains, Pennsylvania, USA, October 19, 2022.
Amy Dillger | Reuters
A survey by the US Federal Reserve Board (Fed) shows that Americans are growing more concerned about inflation in October, with concerns about a sharp rise in gasoline prices.
Inflation expectations rose to 5.9% next year, up 0.5 percentage points from September and the highest since July, according to the New York Fed’s monthly survey of consumer expectations. The three-year forecast also accelerated him to 3.1%, while the five-year outlook saw him rise to 2.4%, up from 2.9% and 2.2% respectively.
Underlying the growing concern was the expected surge in prices in pumps, which have been declining over the past month.
Respondents believe gasoline prices will rise 4.8% over the next year from 0.5% in September, against the largest one-month increase in survey data dating back to June 2013.
Year-on-year forecasts for food prices have risen, with consumers now expecting a 7.6% rise from 6.8% in September. Outlook for health care and rent remained little changed, the latter of which he rose 0.1 percentage points, while the outlook for college costs he fell to 8.6%, down 0.4 percentage points from September.
The survey comes less than a week after the Bureau of Labor Statistics reported that inflation, as measured by the consumer price index, rose 0.4% in October. That was below Dow Jones’ monthly gains forecast of 0.6%, and the annual gain of 7.7% was 0.5 percentage points lower than the previous month.
Federal Reserve policymakers have aggressively raised interest rates this year to keep inflation in check. The series of hikes lifted the central bank’s benchmark rate by about 3.75 points, and the market expects him to raise rates further in the first half of 2023.
The rise has already had some impact, especially in the housing market where 30-year mortgage rates have risen by about 7%, impacting sales and prices.
Home prices are expected to rise by 2%, the same as in September, hitting the lowest level since June 2020.
The Fed’s efforts to cool the red-hot labor market are also expected to have some impact. About 42.9% of respondents expect the unemployment rate to rise one year from now, representing the highest level since April 2020.
However, the survey showed a record level of median expectations for household income next year at 4.3%. Spending growth rose 1 point to 7%.
Credit is expected to become even harder to come by, with a record 56.7% believing it will be even harder to get funding a year from now.
Another indicator released on Monday from a quarterly survey of professional forecasters also showed rising inflation coupled with lower economic growth. GDP growth is projected to be just 1.6% this year and 1.3% in 2023, while CPI inflation is projected to be 7.7% in 2022 and 3.4% in 2023, compared with earlier estimates, according to the study. are up from 7.5% and 3.2% respectively.
