By Brai Odion-Esene
WASHINGTON (MNI) – An Atlanta Federal Reserve Bank survey released
Wednesday showed businesses in the Sixth district revised their
expectations for inflation in 2012 up slightly, and now expect an
increase of 1.9%, compared to 1.8% in the January survey.
The expectation of a 1.9% uptick in inflation is measured by the
“rise firms anticipate in their year-ahead unit costs,” the Atlanta Fed
said.
“Firms also reported that their unit costs had risen 1.8% compared
to this time last year, which is 0.3 percentage point higher than their
assessment in January,” it added.
The Atlanta Fed’s Business Inflation Expectations Survey is
highlights Southeastern businesses’ expectations on the inflation
outlook and other factors that can drive pricing decisions.
The survey said respondents indicated that sales remain below
normal and margins depressed.
“Looking forward, firms anticipate labor costs will put little or
only moderate upward pressure on prices in the year ahead,” the Atlanta
Fed said.
However, expectations for non-labor costs rose in February, with
74% of respondents predicting a moderate or strong upward influence on
prices coming from materials and other non-labor inputs.
In addition, the Atlanta Fed said firms surveyed project their
sales, productivity and margin adjustments are likely to have a “small,
though positive” influence on prices in 2012.
The survey also included a special question intended to gauge
inflation expectations and inflation uncertainty over the longer term,
which showed that on average, survey respondents project unit costs to
rise by 2.9% per year over the next five to 10 years.
Business uncertainty about the future path of inflation was 2.8%,
the Atlanta Fed said.
** Market News International Washington Bureau: 202-371-2121 **
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