Inflation Expectations Take Historic Dive From June: What New York Fed Consumer Survey Says About Gas, Food Prices

Consumer expectations for inflation are becoming more positive, according to a new survey released by the New York Fed.

A broad-based sample of consumers shows they expect inflation rates to largely decrease for food and gas prices.

The July edition of the New York Federal Reserve’s monthly Survey of Consumer Expectations shows a steep decline in inflation expectations when compared to the June survey.

Median one- and three-year-ahead inflation expectations were set by consumers at 6.2% and 3.2%, respectively. This is a very positive omen when compared to the respective 6.8% and 3.6% figures in the June survey.

Related Link: Fed Governor Michelle Bowman Urges For Rate Hikes Until Inflation Falls In 'Meaningful And Lasting Way'

Both decreases were broad-based across income groups, says the survey.

Inflation expectations for the five-year ahead median also declined to 2.3% in July, down from 2.8% in June. 

Specifically for food and gas prices, expectations fell sharply in what amounts to the two largest monthly drops in the history of the survey, which launched in 2013.

“Home price growth expectations and year-ahead spending growth expectations continued to pull back from recent series highs. Households’ income growth expectations improved,” according to the New York Fed. 

Image by Dmadeo on Wikimedia Commons.