NEW YORK (Reuters) - An increasingly important gauge of U.S. inflation rebounded last month from record low levels, adding to other firming price measures that could help pave the way for Federal Reserve interest rate hikes in the months ahead.
The New York Fed’s survey of consumers found expectations for inflation one year in the future rose to 2.71 percent in February, from January’s 2.42 percent, which was the lowest level since the survey began in mid-2013.
Median expectations three years in the future edged up to 2.62 percent last month, from 2.45 percent.
Both measures remain close to the low end of the history of the internet-based New York Fed survey, which taps a rotating panel of 1,200 household heads and is done by an outside organization.
While the Fed lifted rates from near zero in December, a global market selloff and worries over falling inflation means policymakers will likely hold off any further tightening at a meeting this week. In recent weeks, however, price measures have firmed and investors have increasingly predicted another rate hike by mid year.
In further good news for the U.S. economy, expected one-year-ahead earnings growth rebounded to 2.5 percent in February after falling the previous two months, the survey found. Gauges of Americans’ expected income and spending growth also rose last month.
Reporting by Jonathan Spicer; Editing by Meredith Mazzilli and Andrea Ricci
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