Americans fear the highest inflation in nearly a decade
As the economy re-opens after the coronavirus crisis, more and more Americans expect inflation to rise in the next few years.
Overall, inflation is expected to be as high as 3.4% in one year – its highest level since September 2013 – and 3.1% in three years, according to the New York Federal Reserve Bank’s consumer expectations survey for April.
Expectations of how much more consumers will spend on homes, rent and the cost of a college education rose in April, while the expected change in gas prices declined slightly from a high in March.
At the same time, consumers polled by the New York Fed expected a slight decline in household income and spending growth, but remained above the 12-month average, the central bank said.
More from Personal Finance:
The pandemic drove these Americans into early retirement
Small businesses struggle to find workforce
The prospects for new college graduates are improving for the 2021 class
“Households’ perceptions of the current year-over-year financial health improved in April, with fewer respondents saying they are now worse off,” the New York Fed report said.
“The expectations for the financial situation of private households in the coming year were largely stable.”
It is inevitable that reopening the economy will lead to a pick-up in inflation, experts say.
The consumer price index for April is expected to show a modest 0.2% increase from March when reported by the Department of Labor on Wednesday.
The New York Fed’s survey of consumer expectations is based on around 1,300 households.
Subscribe to CNBC on YouTube.