"NY Fed survey: Inflation expectations are plunging
Neil Irwin
Data: Federal Reserve Bank of New York; Chart: Axios Visuals
Americans' expectations for future inflation plunged in July, at least according to one closely watched survey out this morning. That's great
news for anyone who doesn't want current prices to become the new normal.
Driving the news: The Federal Reserve Bank of New York's Survey of
Consumer Expectations showed steep drops in how high respondents
expected inflation to be across a variety of time horizons.
Why it matters: The higher people expect inflation to be, the more
likely it is to materialize as businesses feel more comfortable raising
prices and workers demand steeper wages.
In that sense, falling inflation expectations are a welcome sign that
the high inflation of the last year is not causing a long-lasting shift
in Americans' psychology around money.
Yes, but: Inflation expectations in this survey remain far above the
levels that prevailed in the years before the pandemic, and above the 2% inflation rate the Fed is targeting.
By the numbers: Survey respondents expected inflation of 6.2% over the
next year, down from 6.8% in June. That was the steepest one-month drop
in that number in the survey's nine-year history.
Expectations over the next three years fell to 3.2% from 3.6%, and
five-year expectations to 2.3% from 2.8%
The drop was most pronounced among survey respondents making less than
$50,000, perhaps reflecting that those most pinched by soaring gas
prices saw some relief last month.
Between the lines: Fed chair Jerome Powell mentioned the New York Fed's
results as a reason to pivot toward more aggressive rate increases at
the June policy meeting. So the numbers receding some will likely give
comfort to the central bank.
Meanwhile, the survey also showed that Americans' expectations for their
own wages remain stable. Survey respondents expected their earnings to
rise 3% over the next year, as they have for seven straight months.
Americans remained generally optimistic about the labor market, despite
the bumpy economic environment: The average perceived probability of
losing one's job over the next year edged down to 11.8%.
The bottom line: The signs are pointing toward Americans viewing high
inflation as a temporary aberration, not simply the way things will
always be."
https://www.youtube.com/watch?v=sgbUl9sTgHw
Yeah, hard times for Fakes News and the retrumplicans singing and
dancing for suffering.
Free, extra, added, bonus link:
"Has the love affair between Trump and Fox News gone sour?"
https://www.theguardian.com/us-news/2022/aug/08/trump-fox-news-presidential-run-2024
TB
--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)