U.S. consumers’ outlook for inflation over the short run fell to the lowest level in nearly three years in December, the New York Federal Reserve said. Inflation one year from now is expected to be at 3.0%, the lowest reading since January 2021, versus a projection of 3.4% in November, the regional Fed bank said in its latest Survey of Consumer Expectations. Poll respondents saw inflation three years from now at 2.6%, compared to 3.0% in November, while price pressures five years ahead were at 2.5% versus 2.7% in November.
The survey found the expected year-ahead rise in gasoline prices held steady at 4.5% in December, with expectations for home price rises unchanged at 3.0%.
Respondents in the New York Fed poll also forecast slower gains in household earnings and spending, with the latter measure moving to 5.0% in December, its weakest reading since September 2021.
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