Rising prices for a variety of goods are having a widespread impact on consumer attitudes, according to a new survey released by the Federal Reserve of New York.
In its latest Survey of Consumer Expectations, the Fed found that a majority of respondents expect to see the inflation rate increase by a significant 5.2% in the months to come.
While that may not seem like a lot, the number represents a concern that did not importantly exist in the last several years, when the expectations were for a less than 3% increase.
Inflation uncertainty, says the Fed in a press release, is currently “well above the levels observed before the Covid 19 pandemic.”
With input from some 1,300 household heads, the latest survey also indicates concerns about food prices with expectations for a 7.9% increase; and rents, expected to go up by 10% in the next 12 months.
Analysts say that while such responses are entirely attitudinal, they can lead to a reduction in spending among consumers concerned about rising prices.
Ironically, the Fed survey comes as the actual rate of inflation has marginally decreased from 5.4% in July to 5.3% last month.
The drop, according to the Bureau of Labor Statistics, has been most noticeable in the price of used cars and trucks, while increases were recorded in food, energy, and medical services prices.
Inflation concerns have particularly challenged the construction industry, with price hikes in everything from plywood to steel to polyvinyl chloride pipe.
According to the publication Construction Dive, such price hikes currently have the “potential to put many small and mid-sized construction companies out of business.”
By Garry Boulard
