Americans don’t think high U.S. inflation is going away anytime soon.
Consumers believe will prices will continue to rise sharply over the next year, with inflation averaging 6%, according to a survey by the New York Federal Reserve. That’s up from 5.8% in January and matches the highest level on record.
The rate of inflation, as measured by the consumer price index, has jumped 7.9% in the 12 months ended in February. It’s the biggest increase in 40 years.
What’s more, soaring prices of oil, wheat and other key supplies threaten to lift inflation even higher in the next several months. The Russian war on Ukraine is driving up the price of many commodities.
Some analysts contend the yearly rate of inflation could approach 9% by late spring.
Still, Wall Street
economists and consumers alike think inflation is likely to moderate in the not-too-distant future. Consumers expect inflation to average about 3.8% three years from now, the Fed survey showed.
Americans still have lots of confidence in the economy despite worries about inflation.
They say jobs are easy to find and they feel the most secure ever that they won’t lose their current job.
Consumers also think earnings will rise at a 3% pace in the next year — not enough to match the rise in inflation but much higher than the pre-pandemic norm.
Yet with the Fed set to raise interest rates over the next few years, Americans also think it will be harder to get credit.
They also doubt the stock market will perform well. The fewest share of survey respondents since 2013 think the stock market will be higher 12 months from now.