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Survey shows U.S. consumers expect inflation to run a bit lower over next year

According to a Federal Reserve Bank of New York survey, consumer expectations about price changes in the year ahead decreased sharply to 1.5% for gas and to 6.7% for food. File Photo by Bill Greenblatt/UPI | <a href="/News_Photos/lp/58fa5c37447c7263dabd52e8f01119fc/" target="_blank">License Photo</a>
According to a Federal Reserve Bank of New York survey, consumer expectations about price changes in the year ahead decreased sharply to 1.5% for gas and to 6.7% for food. File Photo by Bill Greenblatt/UPI | License Photo

Aug. 8 (UPI) -- The expectation among consumers that the United States will continue to see high inflation "fell sharply" in July with declines in gas prices, according to a survey Monday from the Federal Reserve Bank of New York.

The bank's Center for Microeconomic Data released its Survey of Consumer Expectations on Monday, which showed "substantial declines" last month in expectations for inflation in the short and long term.

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"Expectations about year-ahead price increases for gas and food fell sharply," the Federal Reserve Bank said in a statement.

"Home price growth expectations and year-ahead spending growth expectations continued to pull back from recent series highs. Households' income growth expectations improved."

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The survey found that respondents expect inflation to rise at a rate of 6.2% for the next year, followed by declines to 3.2% in the next three years and 2.3% in the next five years.

Those decreases in the expected inflation rate, about 0.4% for each time period, are considered a large drop in consumer expectations and could signal a healing economy -- which would be a huge win for the Federal Reserve and its decision to significantly raise key interest rates recently to control inflation.

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According to the survey, expectations about price changes in the year ahead decreased sharply to 1.5% for gas and to 6.7% for food. The food projection marks the largest decrease in the expected growth since June 2013.

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Federal data last month showed that food prices rose by 10.4% over the past year through June and gas prices have declined for about two months straight after reaching record levels in June.

Monday's survey noted that home prices are expected to rise 3.5% within the next year, the lowest projected gain since late 2020 -- and rent growth is expected to decline from 10.3% to 9.9%.

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