Americans expect gas prices to remain stable over the next 12 months, leading to speculation about a decline in inflation, according to a survey released Monday by the Federal Reserve of New York. File Photo by Bill Greenblatt/UPI | License Photo
Sept. 12 (UPI) -- Americans expect gas prices to remain stable over the next 12 months, leading to speculation about a decline in inflation, according to a survey released Monday by the Federal Reserve of New York.
"Inflation expectations continued to decline across all horizons," the August edition of the Survey of Consumer Expectations found.
"Expectations about year-ahead price increases for gas also continued to decline, with households now expecting gas prices to be roughly unchanged a year from now."
The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave.
The average price for a gallon of regular fuel was $3.716 at 1:04 pm EDT on Monday. It sat at $3.175 one year ago, according to AAA. Both numbers are well below this year's high point of $5.016 per gallon, hit in mid-June.
Expectations around home price growth also fell sharply, while expectations of future credit access deteriorated as consumers' optimism grew about the future household income and financial situations, according to the report.
On average, survey respondents expect the annual inflation rate to be 5.7% in one year, a decline from 6.2% in July. The figure is also at its lowest level since October 2021.
In late July, a closely watched government inflation report basically echoed what two earlier economic reports signaled: Inflation seems to be cooling off as gas prices fall.
According to the Personal Consumption Expenditures index, inflation climbed by 6.3% over the 12-month period that ended in July.
The PCE index is considered the Federal Reserve's top indicator for inflation. It measures prices paid by consumers for goods and services. The index does not include fuel or food prices because of volatility.
The U.S. Federal Reserve has continued to implement steep rate hikes to the benchmark interest rate in an effort to curb the rising inflation. The Fed hiked the rate by 0.75 percentage point once again in July .
The board's Federal Open Market Committee next meets on Sept. 21 before it issues its next recommendation on increasing interest rates.