Inflation for Americans may be improving according to a survey by the New York Federal Reserve.
US consumer inflation expectations fell further in August, with gasoline prices falling from June’s all-time high, a development likely to be welcomed by the Federal Reserve in deciding how much to raise the rate. of interest next week.
Consumers in August saw inflation of 5.75%, down from 6.2% in July and the lowest rate since October 2021, the New York Fed’s monthly survey of consumer expectations showed on Monday.
They also forecast price increases of an average of 2.8% over the next three years, the slowest pace since the end of 2020, after 3.2% in July.
Those results may give some relief to central bank policymakers, who have been concerned that the highest inflation in 40 years could alter consumer perceptions about how entrenched current price shocks may be, would make the job of containing inflation even more difficult.
Markets expect the Federal Open Market Committee, the Fed’s monetary policy-setting panel, to raise the benchmark overnight lending rate again from the current range of 2.25%-2.50% at its meeting. September 20 and 21.
The Fed has raised rates by 75 basis points three times in a row, and contracts in futures markets linked to fed funds expectations are predicting a similar third hike next week.
The survey also brought some upbeat news for the labor market, which Fed officials expect will weaken somewhat as interest rates rise to dampen activity and demand overall.
Consumers who responded to the New York Fed’s questionnaire in August saw a lower chance of losing their job next year than in July and a higher chance of finding a new job if they lose their current one.
Additionally, the percentage of people who consider it likely to quit their current job fell to the lowest level since March 2021.