: Consumers expect prices to keeping cooling — but the damage may have already been done

by | Sep 12, 2022 | Stock Market

The red-hot price inflation that’s burned so many people this year appears to be finally cooling down on everything from gas prices to housing costs, and consumers are finally starting to see light at the end of the inflation tunnel, according to a new look at consumer expectations. A day before closely-watched data comes on August’s inflation rates, the Federal Reserve Bank of New York’s consumer expectation survey shows that people keep toning down their own inflation rate predictions for the near future.

In the latest New York Fed survey, researchers found: • Median inflation expectations in August were 5.7% for the coming 12 months, down from 6.2% a month earlier. • For the coming three years, median inflation expectations dropped to 2.8% from 3.2% • Predicted cost growth for gas, groceries and rent moderated, while expected home price growth dropped by 1.4 percentage points to 2.1%. That’s the lowest read on predicted home price growth since July 2020. Survey participants across all regions shared the view, researchers noted. Put the findings next to professional forecasters, and there’s an emerging chorus predicting cooling prices and inflation that’s easing off four-decade highs. On Tuesday, the Bureau of Labor Statistics is scheduled to release August’s consumer price index. The index is expected to show prices declining 0.1% month to month, according to economists polled by the Wall Street Journal. If that’s how it shakes out, i …

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