A worker stocks items at a grocery store in San Francisco, California, May 2, 2022.
David Paul Morris | Bloomberg | Getty Images
Consumers grew a little more optimistic about inflation in April, although they still expect to spend significantly more in the coming year, according to a Federal Reserve survey released Monday.
Inflation expectations over the next year have fallen to a median of 6.3%, down 0.3 percentage points from the record high in March, according to data dating back to June 2013. On a Three-year basis, expectations rose 0.2 percentage points to 3.9%, which is itself 0.3 percentage points off the record high.
The data is accompanied by 12-month inflation in March at 8.5%, the highest level since December 1981. April consumer prices are due out on Wednesday.
In response to soaring prices, the Fed last week raised benchmark interest rates by half a percentage point, the biggest rise in 22 years and the second increase of the year.
“We have our job to do and we have to bring inflation down,” Minneapolis Fed Chairman Neel Kashkari told CNBC’s “Squawk Box” in an interview Monday morning.
Americans are still wary of the high cost of living. Household spending is expected to rise 8% over the next year, according to the New York Fed survey. That’s an increase of 0.3 percentage points from a month ago and another series high.
However, there was also some optimism as consumer expectations for gasoline price increases fell to 5.2%, a 4.4 percentage point decline that occurred as prices oil fell slightly in April. Respondents have also become more secure in their jobs, with just 10.8% expecting to lose their jobs in the next 12 months, tied with an all-time low.
Expectations for house prices remained unchanged, but the anticipated 6% increase remains above the long-term average.
–
