WASHINGTON — The Atlanta Federal Reserve Bank's monthly survey released Wednesday shows businesses in the Sixth district left their inflation outlook for the next 12 months essentially unchanged, with unit costs over the next five to 10 years expected to climb 2.7% annually.

Respondents to the survey projected unit costs to increase by 1.9%, same as the expectations in the September survey, and compared to 2.0% in the August survey.

The Atlanta Fed survey said businesses' inflation uncertainty was unchanged from the previous month, registering 2.4% in October, same as in September. Firms reported unit costs had risen by 1.7% compared to a year ago.

The survey was conducted October 7-11 with 216 firms responding to questions about business conditions, inflation outlook, year ahead unit sales level growth and long-term inflation expectations.

According to the survey, sales levels declined in October, with 46% of respondents saying current sales levels are at or above normal compared to 52% in September. Profit margins also declined, respondent said, with 41% of respondents indicating that profit margins are at or above normal, compared to 49% in September.

In a quarterly question, the Atlanta Fed asked about long-term inflation expectations. Over the next five to 10 years, respondents said they expect unit costs to increase about 2.7% per year, which is slightly lower than July's reading of 2.8% when the question was last asked. The uncertainty around this expectation in October, however, was unchanged from July at 2.4%.

The Atlanta Fed also asked about year-ahead unit sales level growth expectations. On average, businesses expect 1.9% growth in unit sales level, up slightly from the 1.8% growth expected when the fed last asked in the question in April.

"However, year-ahead sales level growth expectations have improved considerably since the November 2012 mean expectation of 1.2 percent," the Atlanta Fed said.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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