ATLANTA — Business executives say they’re expecting inflation of 1.9 percent over the next year, according to a survey the Federal Reserve Bank of Atlanta released Wednesday.
Many economists and political pundits are warning that Congress’ failure to quickly extend the debt ceiling could result in a weakening of the U.S. dollar that triggers inflation and higher interest rates.
The federal government had already shut down when the Fed surveyed 216 firms across the Southeast Oct. 7-11. Their average expected inflation rate in the October poll was unchanged from September and slightly lower than the 2.0 rate predicted in August. And they say they’re 97.6 percent certain, which is also unchanged since the previous month despite the increased political shouting.
Asked about their view of long-term inflation, the firms expect the costs of what they buy to rise 2.7 percent over the next five to 10 years, a prediction that’s essentially held steady since July.
The Fed also asked the firms about their own business. The companies said that they are paying 1.7 percent more for what they need compared to this time last year.
About 46 percent of firms say their sales are at or above normal levels, but in September, there were 52 percent of those reporting normal or better revenue. Profit margins showed a similar setback as 41 percent claimed normal or above levels this month compared to 49 percent last month.