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Inflation Project


Business Inflation Expectations
Special Questions Series

In addition to gauging firms' price-setting environment and year-ahead unit cost expectations, the Atlanta Fed uses the survey to investigate issues of longer-term interest for research and policy. Frequently, we will ask a "special question" designed for this purpose. Here is a summary of the special questions and responses from our panel.

May 2012: Assessment of "normal" sales levels

Compared to one year ago, how has your estimation of "normal" sales levels changed?

Number of responses Decreased Stayed the same Increased
155 30% 45% 25%

April 2012: Expectations for unit cost inflation over the long term

Projecting ahead, to the best of your ability, please assign a percent likelihood to the following changes to unit costs per year over the next five to 10 years.

Unit costs down (<-1%) Unit costs about unchanged (-1% to 1%) Unit costs up somewhat (1.1% to 3%) Unit costs up significantly (3.1% to 5%) Unit costs up very significantly (>5%) Mean Median Mode Variance
4% 12% 36% 30% 18% 3.0 3.0 2.9 2.6

March 2012: Influences on pricing decisions

ORDINARILY, what level of influence do the following have on your pricing decisions? (1=No influence, 5=Very influential)

  Number of
responses
Labor
costs
Materials
costs
Transportation
costs
Marketing
costs
Demand for
product or service
Inventories Competitive
pressure
Total 150 3.3 3.4 2.9 2.4 3.7 2.4 3.8
Retail & Wholesale Trade 17 3.2 4.1 3.1 2.9 3.4 3.3 4.2
Manufacturing 34 3.2 4.3 3.6 2.1 3.9 2.6 4.0
Other 99 3.4 3.0 2.7 2.4 3.7 2.2 3.6

February 2012: Expectations for unit cost increases over the long term

Projecting ahead, to the best of your ability, please assign a percent likelihood to the following changes to unit costs per year over the next five to 10 years.

Number of
responses
Unit costs down (<-1%) Unit costs about unchanged (-1% to 1%) Unit costs up somewhat (1.1% to 3%) Unit costs up significantly (3.1% to 5%) Unit costs up very significantly (>5%) Mean Median Mode Variance
89 4% 11% 38% 29% 17% 2.9 2.9 2.9 2.8

Note: Responses to the special question are limited to those that were submitted after 5:30 p.m. Monday, February 13, due to a variation in the question text.


January 2012: How frequently do firms make very small adjustments to their prices?

Out of every 20 price changes you make, roughly how many are adjustments of less than 1 percent?

Number of
responses
0 1-2 3-5 6-10 11-15 16-20 N/A
161 35% 14% 13% 15% 6% 9% 9%

The results were mixed. A significant share (35 percent) of firms indicated that they do not make very small price adjustments. However, for a significant minority of businesses, small price adjustments were common.


Note: Percentages may not add up to 100 percent because of rounding.

2011 | 2012