U.S. consumers’ expectations for inflation over the medium term climbed higher in July, reaching the highest level in eight years, data from the Federal Reserve Bank of New York showed Monday.
The median respondent in a July survey of consumers expected an inflation rate of 3.7 percent in three years’ time, the highest since August 2013. A month ago, the median expectation was for 3.6 percent.
Expectations for inflation over the next year inched up to a record 4.84 percent from June’ 4.80 percent.
Older Americans expect far more inflation than younger Americans. The median respondent over 59 years old expects 5.9 percent inflation over the next year. Those under 40 expect four percent inflation. Those between 40 and 59 expect 4.5 percent inflation.
Americans also expect home prices to continue to rise. The median expected rise over the next year is 6 percent. Americans over 59 anticipate a 7.3 percent increase in home prices, down from 8.3 percent a month ago. Those between 40 and 59 expect home prices to rise 5.1 percent. Under 40 consumers expect a 4.7 percent rise in home prices.
The median expectation for rents is an increase 9.8 percent in the coming year, the highest reading since the survey began in 2013. Medical care costs are expected to rise 9.5 percent. Gas is seen as rising 8.1 percent, down from 9.2 percent a month ago. The median expectation for food is a rise of 7.1 percent, down from the 8 percent record high hit in June.