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Consumers' Three-Year Inflation Outlook Rises, One-Year Unmoved, NY Fed Survey Shows
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Consumers' Three-Year Inflation Outlook Rises, One-Year Unmoved, NY Fed Survey Shows
Apr 8, 2024 1:20 PM

03:47 PM EDT, 04/08/2024 (MT Newswires) -- US consumers' three-year inflation expectations climbed in March while the one-year component didn't budge for a third consecutive month, the Federal Reserve Bank of New York said Monday.

Median inflation expectations last month increased to 2.9% from 2.7% over the next three years but held steady at 3% at the one-year horizon, according to the regional Fed's Survey of Consumer Expectations.

Median year-ahead price change expectations climbed for all goods tracked in the survey, including by 0.2 percentage points for both gas and food to 4.5% and 5.1%, respectively. The projections rose by 1.3 percentage points to 8.1% for the cost of medical care, by 2.6 percentage points to 8.7% for rent, and by 0.7 percentage point to 6.5% for college education.

The longer-term five-year inflation outlook dipped to 2.6% in March from 2.9% the previous month, the New York Fed said.

Wall Street largely expects the Bureau of Labor Statistics on Wednesday to report that the consumer price index rose 0.3% sequentially and 3.4% annually in March, according to a Bloomberg-compiled consensus.

"Amid a slew of solid data and elevated inflation, yields continue to rise as investors are seemingly flooding into our previously lonely boat of potentially just two rate (interest rate) cuts this year," Stifel Chief Economist Lindsey Piegza and Economist Lauren Henderson said in a Monday note.

On Friday, nonfarm payrolls posted the largest monthly gain since last May, exceeding market expectations. The US producer price index for March is scheduled to be released Thursday.

The mean perceived probability of losing a job in the next 12 months rose by 1.2 percentage points to 15.7%, the highest reading since September 2020, while the odds of leaving a job voluntarily increased by 1.1 percentage points to 20.6%,the New York Fed said.

The perceived probability of missing a minimum debt payment in the next three months climbed by 1.5 points to 12.9%, the highest reading in four years since the onset of the pandemic.

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