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Americans see stable inflation over the year: new Fed survey
January 13, 2014 / 4:03 PM / 4 years ago

Americans see stable inflation over the year: new Fed survey

NEW YORK (Reuters) - A freshly launched survey released Monday found that consumer expectations for overall inflation remained stable in the recent months for both the short- and medium-term horizon.

The facade of the U.S. Federal Reserve building is reflected on wet marble during the early morning hours in Washington, July 31, 2013. REUTERS/Jonathan Ernst

The survey, published for the first time by the Federal Reserve Bank of New York, attempts to better understand the economy, labor market and household finances just as the U.S. central bank looks to unwind its aggressive policy stimulus.

The questions on inflation and house prices, which match those in existing surveys in the United States, were asked in December and are meant to allow the approximately 1,200 respondents across the country to better express uncertainty.

Both short- and medium-term inflation expectations have remained stable over recent months with a median rate of 3.1 percent expected over the coming year, the Fed survey said.

That falls in line with the closely watched Thomson Reuters/University of Michigan consumer sentiment survey, which found the one-year inflation expectation was 3 percent in December, up slightly from the previous month.

Inflation has remained low at about 1 percent over the past year, below the Fed’s 2 percent goal. Along with high unemployment, such low readings are a key reason the central bank is keeping interest rates near zero and buying $75 billion in bonds each month.

Turning to the labor market, the survey found consumers expect a 22 percent mean probability of voluntarily leaving their job over the next 12 months, and a 17 percent probability of losing their job. If they were to lose a job today, consumers see the probability they would find a new job in three months at 46 percent.

Expectations of the probability of changing a primary residence in the next year came in at 20 percent, according to the survey.

The New York Fed said the new monthly data should be a rich source of information for policymakers and academics.

Reporting by Jonathan Spicer; Editing by Meredith Mazzilli

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