Firms’ Year-Ahead Inflation Expectations And Influences On Prices

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.

An excerpt from the August 2018 BIE Survey dated August 15, 2018 (involving 187 firms responding):

• Inflation expectations: Firms’ inflation expectations went unchanged at 2.1 percent over the year ahead.

also:

• Quarterly question: The majority of firms expect labor costs to put moderate upward pressure on prices over the next 12 months. Fifty percent of firms expect nonlabor costs will also put moderate upward pressure on prices over the next 12 months. Most firms expect productivity, margin adjustment, and sales levels to have little or no influence on prices over the next 12 months.

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

_____