Live News: US consumer inflation expectations ease in August, says New York Fed
The economic outlook for U.S. consumers softened further in August as expectations for inflation and house price growth declined, an improvement that is yet to prompt the U.S. central bank to ease monetary policy during its next meeting.
Consumer inflation expectations over the next 12 months fell to 5.7% in August from 6.2% in July, while the measure of three-year inflation expectations fell to 2.8% , versus 3.2%, according to the Federal Reserve Bank of New York. consumer expectations survey.
“Perceptions about the current financial situation of households compared to a year ago have improved, with fewer households reporting a worse situation than a year ago,” the bank’s economists said.
The improved outlook comes ahead of Tuesday’s release of the closely watched consumer price index for August, which is expected to show a second consecutive monthly decline in the annual rate of inflation.
But the recent improvement probably still isn’t enough to dissuade the Federal Reserve from implementing a third consecutive 0.75 percentage point hike at its policy meeting later this month, as the Fed Chairman said. , Jay Powell, said last week that the US central bank would act “bluntly” to ensure that high inflation does not take hold.
Consumers are more optimistic that gasoline prices and house prices, two big drivers of inflation in recent months, will not rise significantly in the year ahead.
Expectations for house price growth fell to their lowest level since July 2020, with median house price expectations falling 1.4 percentage points to 2.1%. Home prices have soared during the pandemic as a lack of inventory and low interest rates have fueled strong demand.
High prices, along with the Fed’s policy tightening campaign pushing mortgage rates to their highest level since 2008, have since tempered demand from potential buyers.