As the economy reopens in the wake of the coronavirus crisis, more Americans expect inflation to increase over the next few years.
Overall, the expectation is that the inflation rate would be up to 3.4% one year from now — its highest level since September 2013 — and at 3.1% three years from now, according to the Federal Reserve Bank of New York’s Survey of Consumer Expectations for April.
Expectations for how much more consumers will spend on homes, rent and the cost of a college education all rose in April, while the expected change in gas prices fell slightly from a high in March.
At the same time, consumers surveyed by the New York Fed also expected household income and spending growth to retreat slightly, but remain above a 12-month average, the bank said.
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“Perceptions about households’ current financial situations compared to a year ago improved in April, with fewer respondents reporting to be worse off now,” The New York Fed report said.
“Expectations about households’ financial situations in the year ahead were largely stable.”
It is inevitable the reopening economy will generate some pick-up in inflation, experts say.
The April consumer price index is expected to show a moderate 0.2% increase over March when it is reported on Wednesday by the Labor Department.
The New York Fed’s survey of consumer expectations is based on about 1,300 households.
