American consumers' medium-term inflation expectations surge last month
Date
9/11/2024 8:58:26 AM
(MENAFN) In August, American consumers' medium-term inflation expectations saw an uptick, as revealed by a survey released on Monday by the Federal Reserve bank of New York. Specifically, the median expectation for inflation over the next three years rose to 2.5 percent, up from 2.3 percent in July. This increase suggests that consumers are anticipating a higher rate of inflation in the medium term, which could influence spending and savings behaviors.
Despite the rise in three-year inflation expectations, the survey indicated that the median expectations for inflation over the next year and the next five years remained stable. Inflation expectations for the one-year horizon stayed at 3 percent, while the five-year expectation held steady at 2.8 percent from the previous month. These stable long-term expectations reflect a more consistent outlook on inflation in the short and long term, despite the increase in the medium-term forecast.
The survey also noted a slight increase in the median expected earnings growth over the next year, which rose to 2.9 percent from 2.7 percent in July. This figure is just above the 12-month trailing average of 2.8 percent, suggesting that consumers are expecting modest improvements in income growth. This expectation could be a sign of increasing confidence in wage growth amidst a changing economic landscape.
Additionally, expectations for home price growth also saw a minor increase, with the median expectation rising to 3.1 percent in August, up from 3.0 percent in July. This slight adjustment indicates that consumers anticipate a continued, albeit modest, increase in home prices, reflecting ongoing trends in the housing market and broader economic conditions.
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