Expectations about future prices remain elevated: 62 percent of the firms expect input prices to rise over the next six months; 49 percent expect increases in the prices of their own manufactured goods, |
Higher prices for final manufactured goods were also more widespread this month, suggesting that higher costs have been passed on to customers. |
If they tighten again in November, then the steps they've taken in three (interest rate) moves should meaningfully diminish the chances of inflation picking up going forward. |
Nevertheless, many business firms indicated to the District Banks that they expect high prices for energy and construction materials to persist, |
point to recession in both the manufacturing sector and the general economy. |
Price pressures remain but continue to show a moderating trend. |
The employment index was sharply higher this month, and the average hours worked improved. Firms continued to report higher prices for inputs and for their own manufactured goods. |
The trajectory that emerges from this forecast is one in which inflation is temporarily high in the current quarter but quickly approaches the current estimate of long-run inflation of 2.5 percent. |
These forecasts are higher than in the previous survey, particularly for the first half of 2006, suggesting increasing optimism among the forecasters. |