A worker stores items inside a grocery store in San Francisco, California, on May 2, 2022.
David Pablo Morris | Mayor Bloomberg | fake images
Consumers became slightly more optimistic about inflation in April, though they still expect to spend considerably more in the year ahead, a Federal Reserve survey released Monday shows.
Inflation expectations for next year fell to a median of 6.3%, a decline of 0.3 percentage point from the all-time high in March, according to data going back to June 2013. On a three-year basis, expectations rose 0.2 percentage point to 3.9%, which itself is 0.3 percentage point off the record.
The data comes with 12-month inflation in March at 8.5%the highest level since December 1981. Consumer prices for April will be released on Wednesday.
In response to rising prices, the Fed last week raised benchmark interest rates by half a percentage point, the biggest increase 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 President Neel Kashkari told CNBC’s “Squawk Box” on Tuesday. a monday morning interview.
Americans are still wary of the high cost of living. Household spending is projected to rise 8% over the next year, according to the New York Fed survey. That’s an increase of 0.3 percentage point from a month ago and another set high.
However, there was also some optimism as consumer expectations of gas price increases fell to 5.2%, a 4.4 percentage point drop that came as oil prices fell in April. Respondents also became more secure in their jobs, with just 10.8% expecting to lose their job in the next 12 months, tied for an all-time low.
Expectations for house prices have not changed, but the anticipated 6% increase is still higher than the long-term average.