Year-ahead inflation expectations increased for the 10th straight month to a median of 5.2% in August, according to the monthly survey of consumer expectations. Inflation expectations over the next three years increased to a median of 4.0%. Both metrics are at the highest they’ve ever been for the survey, which was launched in 2013.
The New York Fed survey showed that consumers are raising their expectations for how much more they may have to spend on housing, food and other essentials over the next year.
Food prices are expected to grow by 7.9% over the next year, up from 7.1% in July. Rent is expected to increase by 10% over the next 12 months and the price of medical care is expected to rise by 9.7% over the next year – both up 0.2 percentage point from July.
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