U.S. consumers’ expectations for longer-term inflation rebounded last month to the highest level since August, according to results of a Federal Reserve Bank of New York survey released Monday.
Expected inflation three years ahead was 2.9 percent, according to the median respondent of the New York Fed’s monthly consumer survey. The measure, one of a few that Fed policy makers watch closely as an indicator of where actual inflation may be headed, fell in January to the lowest on record in data going back to June 2013.
The data present more good news for Fed officials following Friday’s Labor Department release in Washington, which showed U.S. employers added 287,000 workers to payrolls in June, alleviating concerns that a sharp deceleration in hiring the month before was the start of a new trend.
Fed policy makers see stable inflation expectations and continued job gains as key to raising inflation, which has been below the central bank’s 2 percent target for more than four years.
Expected wage growth over the next 12 months jumped to 2.5 percent in June, marking the highest level in a year, from 2.2 percent, according to the median response to the New York Fed survey. However, just a net 16.6 percent of respondents said they expected to be in better financial shape in a year, the fewest since October 2014.