Consumer inflation expectations continue to rise

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Americans expect the goods to become very expensive.

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why it matters: Even though inflation may not actually rise to the expected level, only expectations can influence behavior.

  • “Some research shows that consumers tend to hold back from spending when they expect high inflation,” said Julia Coronado, founder of Macropolicy Perspectives. said.

By numbers: According to the New York Fed’s Aug. consumer expectations surveyThe respondents saw the inflation rate rising to 5.2% per annum from now on, up from 4.9% in the previous month’s survey.

  • Three years from now, the inflation rate is expected to be 4.0%, up from 3.7% last month.
  • Both figures represent the highest readings since the survey began in 2013.

state of play: business anecdote Continue to reaffirm that inflation remains a challenge.

  • “Unfortunately, inflation is higher than we thought in the third quarter,” says 3M CFO Manish Patolawala said at the Morgan Stanley conference on Monday. “Despite raising the price … we are seeing inflation ahead of price.”

what to watch: The August Consumer Price Index report, which will be published today at 8:30 am, will give a fresh update on what inflation looks like today.

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