Consumer expectations of US inflation declined significantly in July due to the sharp drop in fuel prices and optimism about a slowdown in housing and food prices going forward.
The monthly survey issued by the Federal Reserve in New York revealed that consumer expectations indicate that the inflation rate will record 6.2% over the next year and 3.2% over the next three years.
Although these data reflect historical standards, they indicate an expected decrease in inflation compared to the June survey, which expected an inflation rate of 6.8% over the next year and 3.6% in the next three years.
Through June, food prices rose 10.4% over the past year – according to data from the Bureau of Employment Statistics – and forecasts are for a 6.7% rise in the next 12 months, reflecting a 2.5% point drop, the biggest decline since June 2013.
The survey participants indicated that they see an increase in fuel prices by 60% over the past year, with an expected increase of only 1.5% over the next year, which means a decrease of 5.2% points from the June survey.
Over the course of July, fuel prices have fallen by 67 cents per gallon, but remain about 87 cents higher than their levels in the same period in 2021.
Moreover, house prices are expected to rise by 3.5% compared to the survey the month before last, which forecast a rise of 4.4%, which is the smallest increase expected since November 2020.