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MNI POLICY: US Household Inflation Expectations Hit 7 Yr High

(MNI) WASHINGTON
WASHINGTON (MNI)

U.S. household inflation expectations ticked up again in March reaching the highest level in almost seven years, a New York Federal Reserve survey showed Monday, with expectations for price increases for homes, rent and gas reaching series highs.

The median inflation outlook for the next year and three years ahead both increased by 0.1 percentage point to 3.2%, continuing a run of steady increases over the past five months and reaching highs last seen in mid-2014.

The survey showed consumers disagreed less over the path of year-ahead inflation compared to the prior month, though disagreement remains elevated relative to pre-pandemic numbers.

Consumers' median year-ahead home price change expectations was at a new series high, increasing by 0.8 pp to 4.8%, driven by Americans in the West and Midwest. Expectations of gas prices increased 0.3 pp to 9.9% and rent expectations increased 0.2 pp to 9.3%, both a new series high.

SPENDING OUTLOOK

Views on how household spending might change over the next year increased increased for the third consecutive month to 4.7%, the highest reading since December 2014.

Labor market expectations continued to recover with higher expectations about job security and improved unemployment expectations. The Fed report showed the median expected growth in household income increased by 0.4 pp to 2.8% in March, the highest level since January of last year.

The Fed's survey of consumer expectations is a monthly poll conducted on a rotating panel of 1,300 households.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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