A motorist pumps gas at a Valero station along Encinitas Blvd in Encinitas, CA on Tuesday, April 5, 2022.
Sandy Huffaker | The Washington Post | Getty Images
Concerns are rising over inflation, with new Federal Reserve data showing a record high fear of rising prices.
Consumers now see inflation hitting 6.6% over the next year, according to the New York Fed’s March survey published on Monday. This is a 10% increase in median expectations just over the past month and the highest level in a series dating from 2013.
The survey showed that the median expectations over a three-year period actually fell by 0.1 percentage points to 3.7%, mainly due to a declining outlook from those with an annual household income below $ 50,000.
However, uncertainty about inflation over both one- and three-year spreads showed record high levels.
Household consumption expectations rose sharply, rising 1.3 percentage points to 7.7%, also a new series high.
The data comes a day before the publication of the consumer price index for March, which is expected to show that prices have risen by 8.4% over the past 12 months, according to Dow Jones estimates. If this forecast is correct, it would be the highest number since December 1981.
To combat inflation, the Fed last month approved its first rate hike in more than three years. Further increases are expected during the year, as inflation is well above the central bank’s long-term target of 2%.
Consumers see the fastest increases from rents (10.2%), which account for about a third of the CPI. Medical care, food and petrol are expected to increase by 9.6%. The outlook for college costs fell by 0.5 percentage points to 8.5%.
Expected wage increases remained stable at 3%, while 36.2% said they believe unemployment will rise over the next year, the highest level since February 2021. Unemployment is currently at 3.6%, equal over where it was before the Covid pandemic. the employment rate is still 1 percentage point lower.
Anxiety rose slightly over job stability, with the probability of losing one’s job over the next year rising to 11.1%, an increase of 0.3 percentage points that is still well below the pre-pandemic level of 13.8 %.