Businesses expect inflation to reach 1.9% in the next 12 months, unchanged from forecasts in April, according to the Federal Reserve Bank of Atlanta's most recent business inflation expectations (BIE) survey for May.
"Respondents indicated that, on average, they expect unit costs to rise 1.9% over the next 12 months," according to the survey. "Inflation uncertainty was unchanged at 2.4%. Firms also report that, compared to this time last year, their unit costs are up 1.8%. Respondents' sales levels compared to what they consider 'normal' conditions improved somewhat, with approximately 55% of respondents indicating current sales levels are at or above normal. Profit margins declined somewhat, with roughly 47% of respondents indicating their profit margins are at or above normal, compared to 51% in April."
The Fed conducted the survey May 5-9. A total of 182 firms responded to questions about business conditions, inflation outlook, and potential pricing pressures.
