WASHINGTON, June 14 — The inflation outlook among Americans is at its highest level ever, while many are upbeat about their employment situation, a New York Federal Reserve survey released today said.
The report covering May showed one-year inflation expectations jumped 0.6 points to four per cent, the seventh consecutive monthly increase, while the three-year outlook jumped to 3.6 per cent from 3.1 per cent.
The recent surge in prices as the world’s largest economy reopens following the Covid-19 pandemic has become a concern amid fears the Federal Reserve is too complacent, raising the risk prices will get out of control.
The Fed holds its policy meeting Tuesday and Wednesday and is expected to repeat its message that the current wave of price increases is driven largely by temporary factors, including supply bottlenecks caused by the pandemic’s global shutdowns.
In fact, the Fed wants to see inflation get above two per cent and stay there after more than a decade of only tepid gains, and says it has the ability to bring runaway inflation under control.
The 12-month consumer price index for May spiked to five per cent, while the Fed’s preferred inflation measure was up 3.6 per cent in April.
The New York Fed survey also showed consumers’ views on the probability of losing a job in the coming year fell to a record low of 12.6 per cent from 15 per cent in April. That decrease was more pronounced among younger workers and those earning less than US$50,000.
Conversely, the probability of finding a job jumped sharply, while expectations that the unemployment rate will be higher one year from now — from 5.8 per cent currently — fell to a series low of 31.9 per cent. — AFP