Treasury bond versus the yield on 10-year Treasury Inflation-Protected Securities. The 10-year inflation rate in this chart is based on the recent yield on a 10-year U.S. At 2.21%, it’s very close to the Fed’s target rate. The average expected inflation rate over the next 10 years is shown in the chart above. Over the next three- and five-year periods, the inflation rate is expected by consumers to come closer to the Federal Reserve’s target of 2%. Over the year, inflation is expected to average about 4.1%. The data are based on a survey of consumers conducted by The New York District Branch of the U.S. The rate of Inflation expected by consumers for the next 12 months, three years, and five years are shown in the chart above. Meyer showed several charts tracking inflation expectations, including the two shown below. At his monthly webinar for CFP, CPA, CIMA, CFA professionals, Mr. To comment on this article or to suggest an idea for another article, contact Neil Amato at. Beth Roessner is a senior content writer at AICPA & CIMA, together as the Association of International Certified Professional Accountants. And in a one-point dip from last quarter, 33% said they have too few employees and plan to hire.Ī lower percentage of businesses plan to contract operations: 20% this quarter, compared with 27% at the end of 2022. Forty-five percent of respondents said they have the right number of employees - up from 39%. This quarter, only 11% are hesitant to hire new employees. Last quarter, 17% of respondents wanted to fill employment gaps but were hesitant to hire. Similar to last quarter, hiring remains strong. But more respondents share concern over labor costs - now 42%, up from 41% in the previous quarter - and the costs of raw materials - now 25%, up from 21% in the previous quarter. The potential impact of interest rates dropped from last quarter's 20% to 11%. Respondents are still monitoring the effects of certain inflationary risk factors on their businesses. Energy costs, once a recurring concern, dropped out of the top 10. Rounding out the top five challenges are the availability of skilled personnel, costs of employees and benefits, equipment and materials costs, and domestic economic conditions. While this is a three-point decrease since last quarter, inflation has polled as the top challenge for the last year. 1 challenge, cited by 82% of respondents. economy slowly improves, inflation is the No. And respondents plan to spend a bit more on IT (3.1%), training (1.6%), and other capital (2.5%) - each receiving a tiny boost from the previous quarter.Īdditionally, outlook on the global economy has improved - 48% of respondents are pessimistic, a drastic change from last quarter's 72%. Fifty-two percent of respondents have plans to expand in some capacity, a slight increase from the previous quarter's 47%. Revenue is now projected to increase 2.6%, up slightly from a 2.1% increase that was expected in 2022's fourth quarter. Respondents are feeling better about their businesses' revenue projections, expansion plans, and future spending plans. Inflation, interest rates, unfolding debt ceiling concerns, and the uncertainty from the Federal Reserve's intervention are cited as reasons not to share in the overall optimism. By comparison, 36% of respondents were optimistic about the U.S. Some respondents felt hopeful about the tempering of inflation, strong overall employment, and the continued demand for products - and that resulted in the 11-point jump in optimism to 23% from last quarter's 12%. economies, current and projected challenges, business projections, and additional points of interest. The quarterly survey polled CPA decision-makers - primarily CFOs, CEOs, and controllers - about the global and U.S. economy rebounded somewhat in February 2023, but concern about inflation remains high, according to the first-quarter Business and Industry Economic Outlook Survey released Thursday by AICPA & CIMA, together as the Association of International Certified Professional Accountants. After hitting a historic low at the end of 2022, the outlook on the U.S.
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