WASHINGTON — The Atlanta Federal Reserve Bank's monthly survey released Wednesday showed businesses in the Sixth district lowered their inflation expectations for 2012 to 1.7%, while the measure of their uncertainty regarding the future price fell slightly.
The survey also included a special question which noted that on average firms see sales levels as about 7.6% below normal, although the rate varies depending on the size of the firm.
The survey respondents' expectation of a 1.7% increase in unit costs is down from the +1.9% expectation in last month's survey, and businesses' inflation uncertainty declined by 0.2 percentage point to 2.6% in September.
Firms reported that unit costs had risen by 1.3% on an annual basis, down from their assessment of a 1.6% rise in August.
The survey was conducted September 1014 with 192 firms responding to questions about their business conditions, inflation outlook, and potential pricing pressures.
The survey noted businesses are still operating in an environment of below normal sales levels and profit margins, although "both showed improvement in September," it said.
On their inflation outlook, "Firms continue to anticipate little or moderate upward pressure coming from input costs over the next 12 months," the Atlanta Fed said.
The survey said expectations for the price influence from both labor and non-labor costs over the next year held "roughly steady" in September.
"Respondents also anticipate that margin adjustments and sales levels are likely to have a small upward influence on the prices they charge in the coming year," the Atlanta Fed said.
The survey included a special question aimed at gauging how firms perceive their pricing power.
Participants were presented with a special question aimed at gauging how much current sales levels differ from "normal" times.
"On average, firms see sales levels as about 7.6% below normal, though their assessment of current performance varied widely by the size of the firm," the Atlanta Fed said.
It noted that firms with fewer than 500 employees reported that current sales levels were roughly 9.6% below normal, but that the gap is nearly twice as large as the 4.9% below normal figure reported by larger firms — those with 500-plus employees.
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