Americans' inflation fears hit another record in August as the price of consumer goods continued to surge, according to a Federal Reserve Bank of New York survey published Monday.
The median expectation is that the inflation rate will be up 5.2% one year from now, the 10th monthly consecutive increase and another new high for the gauge, and up 4% three years from now, the highest level since August 2013, according to the New York Federal Reserve's Survey of Consumer Expectations.
"Inflation uncertainty – or the uncertainty expressed regarding future inflation outcomes – increased at both the short- and medium-term horizons to new series highs," the survey said. "Both measures remain well above the levels observed before the COVID-19 pandemic."
Consumers also said they expect the price of things like food, gasoline, medical care and rent to increase over the next year, while expectations for college tuition inched down slightly to 7%.
At the same time, Americans expect the prices of homes to fall slightly, with one-year expectations decreased slightly to 5.9% in August, marking the third straight monthly decline. Despite the decline, it's still substantially higher than the previous one-year average of 3.7%.
The survey comes in light of a new Labor Department report released last week, which showed that inflation at the wholesale level surged at the highest known level since August 2010. The producer price index, which measures inflationary pressures before they reach consumers, climbed 0.7% last month to 8.3%.
Excluding volatile food and energy prices, so-called core inflation jumped 5.4% in July compared to the previous year. Still, month-over-month, the consumer price index climbed 0.3% in July – well below June's increase of 0.9%, a sign that inflation could be plateauing.
Inflation has accelerated as the economy recovers from last year's brief, but extremely severe, recession.
Fed Chairman Jerome Powell has largely attributed the spike in consumer prices to pandemic-induced disruptions in the supply chain, a shortage of workers that's pushed wages higher and a wave of pent-up consumers flush with stimulus cash. Still, he's maintained the rise in inflation is likely "transitory" and has warned about the dangers of the Federal Reserve acting superfluously to lower the benchmark federal funds rate.
The New York Fed survey is based on respondents from about 1,300 households.
The Labor Department is slated to release the August consumer price index on Tuesday, which is expected to show a 0.4% increase from the previous month.