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.
December 2011: The FOMC's longer-run inflation objective
What rate of inflation do you think the Federal Reserve is aiming for in the long run?
| Number of responses |
No opinion | Slightly below 0% | About 0% | About 1% | About 2% | About 3% |
|---|---|---|---|---|---|---|
| 151 | 16% | 1% | 4% | 15% | 49% | 16% |
About half of the panel believe the FOMC is aiming for an inflation rate of 2 percent. The other opinions were about evenly distributed around this number.
November 2011: How are price changes implemented—increases vs. decreases
Survey respondents were randomly assigned one of the following two questions:
Special Question A
When you cut price(s), how is this usually accomplished?
| Number of responses |
Until it's time to reevaluate prices |
Negotiated on a customer-by- customer basis |
With an expiration date |
That lasts as long as product is available |
N/A*** |
|---|---|---|---|---|---|
| 70 | 20% | 33% | 27% | 11% | 9% |
Special Question B
When you raise price(s), how is this usually accomplished?
| Number of responses |
Until it's time to reevaluate prices |
Introduced on a customer-by- customer basis |
In the form of a surcharge |
That lasts as long as product is available |
N/A*** |
|---|---|---|---|---|---|
| 72 | 57% | 38% | 3% | 1% | 1% |
| ***For firms classified as N/A, prices are regulated or otherwise fixed. | |||||
The results indicate that price increases are typically considered as "permanent" adjustments, whereas price cuts are generally implemented on a temporary basis.
October 2011: Adjusting prices in the face of cost pressure
Survey respondents were randomly assigned one of the following two questions:
Special Question A
Faced with a modest rise (2 percent) in unit costs, your firm would most likely:
| Number of responses | Not change prices to protect market share | Not change prices due to contractual obligations | Not change prices because it is costly | Pass a small portion of the cost increase on to customers | Pass most of the cost increase on to customers | Unit costs don't influence our prices | Other |
|---|---|---|---|---|---|---|---|
| 84 | 18% | 7% | 1% | 32% | 31% | 10% | 1% |
Special Question B
Faced with a significant rise (about 6 percent) in unit costs, your firm would most likely:
| Number of responses | Not change prices to protect market share | Not change prices due to contractual obligations | Not change prices because it is costly | Pass a small portion of the cost increase on to customers | Pass most of the cost increase on to customers | Unit costs don't influence our prices | Other |
|---|---|---|---|---|---|---|---|
| 71 | 8% | 7% | 3% | 35% | 37% | 7% | 3% |
Note: Percentages may not add up to 100 percent because of rounding.
