Prices Expected to Rise Two Times Higher Than Wages: Fed SurveyAccording to data from the Bureau of Labor Statistics, the Consumer Price Index increased 6.8 percent in the 12 months through November, the fastest climb in 39 years.
This story originally appeared onThe Epoch Times
U.S. consumers expect short-terminflationto go up along with a drop in future earnings in November, implying a worsening economic outlook with higher prices surpassing any growth in wages, according to a New York Federal Reservesurveyreleased on Monday.
The Survey of Consumer Expectations, taken from a pool of 1,300 household heads, show median one-year-ahead inflation expectations rise from 5.7 in October to 6.0 percent, while uncertainty regarding short- and medium-term inflation reach new series high. Meanwhile, expectations regarding one-year-ahead earnings growth went down by 0.2 percentage points to 2.8 percent. The decline was highest among low income households (below $50,000).
According to data from the Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) increased 6.8 percent in the 12 months through November, thefastest climbin 39 years. This is the sixth straight month of above-five-percent inflation that persists to torment the average American consumer.
Expectations regarding changes in home prices went down slightly from 5.6 to 5.0 percent, but still remains significantly higher than the pre-pandemic 3.1 percent. While respondents expect rents to remain the same, there is an anticipation that gas prices will go down. Food prices are touted to go up (0.1 percent) along with medical care costs (9.6 percent).
As for thelabor market, job openings have rebounded to a near-record high and unemployment has fallen to 4.6 percent with weekly jobless claims declining to their lowest levels since 1969.
People's expectation that the unemployment levels in the country will go higher increased 0.6 percentage points to 36.1 percent. The fear of losing one's job in the next 12 months rose from 11 to 13 percent, but is still below 13.8 percent recorded in February 2020. There is also a higher chance of leaving one's job, and an increase in the possibility of remaining unemployed.
There is a 0.1 percentage point decrease in median expected growth in household income. Meanwhile, the spending expectations went up by 0.3 percent to 5.7 percent, which is a new series high, with the highest increases showing in low-income households.
The prospects of getting credit, now and in future, have decreased as well as the probability of missing on a minimum debt payment over the next three months.
"Perceptions about households' current financial situations compared to a year ago deteriorated in November, with more respondents reporting being financially worse off than they were a year ago," stated a summary report of the survey.
"Respondents were also more pessimistic about their household's financial situation in the year ahead, with fewer respondents expecting their financial situation to improve a year from now."
The current level of inflation might prompt the Fed to increase the speed of its bond tapering process, which is scheduled to be finished by June next year. This will initiate interest rates hikes, and bring about a situation to curb the increasing prices.
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
