U.S. businesses expect slightly lower cost pressures over the coming year, according to the Federal Reserve Bank of Atlanta's Business Inflation Expectations (BIE) survey released on Wednesday, October 21. Year-ahead business inflation expectations stood at 2.3% in October, down from 2.4% in September, Seeking Alpha reported.
Source: Seeking Alpha (Atlanta Fed survey)
Year-ahead unit cost expectations have fallen considerably since hitting a peak of 3.8% in April 2022, the survey summary noted. The October reading of 2.3% nevertheless remains above the 2.0% average recorded between January 2017 and December 2019, before the pandemic — a sign, in the survey's own framing, that expected cost pressures have eased a long way from their peak but have not fully returned to pre-pandemic norms.
Source: TradingView / GuruFocus
Firms are less sure where their costs are heading
Uncertainty surrounding companies' year-ahead unit costs has increased since reaching a low of 1.9% in February, indicating businesses have become less confident about exactly where their costs are heading, TradingView's GuruFocus report on the survey said. Longer-term expectations also remain elevated across most major industries compared with pre-pandemic levels.
Source: TradingView / GuruFocus
The survey also carried a steadier signal from the labour market: most companies said employee turnover had been relatively stable over the past year, and looking 12 months ahead, the average business expects monthly turnover to decline by roughly two percentage points to 5.6%, the report said.
Source: TradingView / GuruFocus
The BIE is a monthly Atlanta Fed survey of businesses about their own unit costs — what firms themselves expect it will cost them to produce and sell over the next year. Because businesses set prices, hiring plans and investment partly on those expected costs, the Federal Reserve watches the survey as one gauge of whether inflation pressures are settling. For diaspora households and small businesses in the U.S. — from trucking firms watching diesel and maintenance costs to stores setting shelf prices — the practical read is the same one the survey gives: costs are still expected to rise, just a little less quickly than firms feared in September.
Source: Seeking Alpha (Atlanta Fed survey)
2.3% — U.S. businesses' year-ahead inflation (unit cost) expectation in October 2026, down from 2.4% in September (Atlanta Fed BIE). 3.8% — the survey's April 2022 peak. 2.0% — the pre-pandemic average (Jan 2017–Dec 2019). Cost uncertainty has risen since a 1.9% low in February, and firms expect monthly staff turnover to ease to about 5.6% over the next year.
What is solid
- Year-ahead business inflation expectations fell to 2.3% in October from 2.4% in September, in the Atlanta Fed BIE survey released October 21, 2026 (Seeking Alpha; TradingView/GuruFocus)
- Expectations are well below the survey's 3.8% peak in April 2022 but remain above the 2.0% pre-pandemic average for 2017–2019
- Business uncertainty about year-ahead unit costs has increased since a 1.9% low in February; most firms reported stable employee turnover over the past year
What is only claimed
- What the dip means for Federal Reserve policy is interpretation, not a survey finding: the same release shows expectations still above pre-pandemic levels and uncertainty rising, so the October report alone does not settle whether price pressures have fully normalised