Median one-year consumer inflation projections rose slightly last month to 3.6%, from 3.5% in July.
September 12, 2023 (The Republic)-US consumer inflation expectations remained mostly strong in August, but households are more concerned about their finances and more pessimistic about the labor market, according to a survey by the Federal Reserve Bank of New York.
Median one-year inflation expectations rose slightly last month to 3.6%, from 3.5% in July, the New York Federal Reserve reported on Monday.. Expectations of what inflation will be in the three-year horizon will decrease from 2.9% to 2.8%. And the five-year inflation outlook rose from 2.9% to 3.0%.
There are more dramatic changes in the way consumers view their finances. “Both views about current credit conditions and expectations about future conditions have deteriorated,” the New York Fed said in a statement.
Respondents said they think the unemployment rate is more likely to be higher a year from now. The perceived probability of losing a job next year will increase by 2 percentage points to 13.8%, the highest reading since April 2021. The probability of voluntarily changing jobs next year will increase to 1.9 percentage points in August to 18.9%. The increases are for both The questions are longer for people with a high school education or less and an annual income of less than US$50,000.
The loan concern
Consumers are increasingly concerned about their ability to access credit, and the share of households that say it is more difficult or somewhat difficult to access credit compared to a year ago increased the most high level since it started the survey in June 2013 . They also said they expect it to be harder to get credit next year.
Fedon bankers have raised interest rates significantly over the past 18 months and in July raised their benchmark rate to the highest level in 22 years in an effort to cool demand and control inflation. Those higher rates They increase borrowing costs and may cause banks to restrict access to loans and other loans.
As inflation cools, the monetary authority is slowing the pace of its rate hikes and is expected at the next meeting, which will take place from September 19 to 20, leave its reference rate unchanged in the target range of 5.25% to 5.5%. The consumer price update expected on Wednesday will help inform your decision.
Encouraged by signs that price and labor market pressures are gradually cooling, Federal Reserve bankers are determined not to waste their chance to avoid a “soft landing” from the surplus. increasing interest. , although they remain committed to their goal of bringing inflation back to their 2% target.