Consumers Brace for Prolonged Inflation Pain as Outlook Darkens
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US consumers' long-term inflation expectations rose to a 12-year high of 3.2% over the next 5-10 years, up from 3% last month, according to University of Michigan data.
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Consumers expect prices to climb 4.4% over the next 12 months, up from 4.2% last month, attributed mainly to expectations for higher gasoline prices.
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The combination of high inflation, borrowing costs, and weak labor market outlook may hurt consumer spending and economic growth, per the University of Michigan survey director.
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Fed Chair Powell reiterated the central bank's willingness to continue raising interest rates if needed to control inflation.
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Survey respondents cited high unemployment as a factor that will keep inflation elevated over the next year, despite the jobless rate being relatively low at 3.9% in October.