Americans expected only soft price inflation over the next few years, in part due to cheaper gasoline, according to a Federal Reserve survey last month that also found that purse strings were tightening across the nation.
The New York Fed's survey of consumer expectations, released on Monday, showed one-year ahead inflation expectations of 2.7 percent in April. This was down from 2.9 percent a month earlier and the lowest level since the web-based survey began in mid-2013. The median three-year ahead forecast was 3 percent, the second-lowest showing.
The Fed is looking to raise interest rates later this year but wants to be sure that actual price inflation, which remains low, will rebound to its 2-percent target. The April jobs report showed only a modest rise in wages.
The New York Fed survey found lower gas price expectations. It also found expectations for household spending growth in the year ahead tumbled to a survey series low of 3.8 percent, which could signal fragile confidence in overall economic resilience.
However, Americans still expect strong earnings growth in the year ahead, while workers saw slightly lower chances of losing current their job.
The survey taps about 1,200 respondents on a 12-month rotating basis.