Business leaders expect President Joe Biden’s inflation to rise more than expected in March, according to the Federal Reserve Bank of Atlanta’s business inflation expectations (BIE).
The Federal Reserve Bank of Atlanta’s measure of business expectations for inflation showed that, on average, firms in March expect prices to spike by 3.1 percent, a significant increase. The previous forecast was for it to be unchanged at 2.9 percent.
This measure had been steadily dropping since April 2022 before increasing 11 months later in March 2023.
The inflation survey covers businesses in the Sixth District of the Federal Reserve system, which includes Alabama, Florida, Georgia, and portions of Louisiana, Mississippi, and Tennessee.
The increase in inflation expectations comes a week after the government said core consumer prices, which exclude the volatile categories of energy and food, rose by 0.5 percent and overall prices climbed 0.4 percent. The increase in core prices was faster than the 0.4 percent expected and faster than the January pace of 0.4 percent. Compared with a year ago, core prices are up 5.5 percent, a tick down from the 5.6 percent 12-month increase in January.
Measures of underlying inflation showed that the Fed has still made very little progress in bringing inflation down to its two percent target. The Cleveland Fed’s median CPI measure came in at a 0.6 percent increase compared with the prior month, a 7.2 percent annualized rate of inflation. The 16 percent trimmed mean inflation, which excludes the top and bottom eight percent of price moves, came in at a 0.5 percent rise, a 6.48 percent annual rate of inflation.
In a separate report on Wednesday, the Department of Labor said the producer price index fell by 0.1 percent in February. The index for core producer prices — which excludes food, energy, and trade services — rose increased 0.2 percent in February, a deceleration from the 0.5 percent recorded in January.
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