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US inflation expectations retreat in September: NY Fed survey

[NEW YORK] Two measures of US inflation expectations fell in September, with one hitting a low water mark, according to a Federal Reserve Bank of New York survey that also found Americans predicted less earnings growth in the year ahead.

The survey of consumer expectations, an increasingly influential gauge of prices for the US central bank, found that median year-ahead inflation expectations tumbled to 2.5 per cent last month, its lowest recorded level, from 2.8 per cent in August.

Three-year ahead expectations slid to 2.6 per cent, from 2.7 per cent, to near a record low. Both of the price measures have been gradually declining since the online survey began in mid-2013.

Other national price measures have edged higher in recent months, though inflation remains below a Fed target. The Fed, looking to raise interest rates before year end, wants to see signs of inflation pressures before acting.

The New York Fed survey, in which an outside group taps a rotating sample of 1,200 households, also found that median one-year ahead earnings growth decreased to 2.0 per cent last month, from 2.4 per cent in August.