Expectations For Year-Ahead Inflation And Tax Impact

The Federal Reserve Bank of Atlanta publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit costs, unit cost expectations, sales levels, profit margins, and other factors.

As described on the site:

Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.

Two excerpts from the February 2018 BIE Survey dated February 14, 2018 (involving 168 firms responding):

• Inflation expectations: Firms’ inflation expectations were unchanged at 2.0 percent over the year ahead.

also:

• Quarterly question: The influence of labor costs, nonlabor costs, and sales levels on prices over the year ahead increased slightly. The majority of firms expect productivity and margin adjustments to have little or no influence.

• Special question: Firms indicated which business structure they use for tax purposes and whether they expect to see a reduction in their tax bill as a result of the recently passed Tax Cuts and Jobs Act. See the special question section for a breakdown of the results.

The report also includes other questions and a variety of charts and tables depicting respondents’ answers.

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