Firms now expect 3.3% CPI inflation over the next year, down from 3.7%, while R&D growth forecasts fall to 2.0% from 3.1%.
Businesses surveyed by the Cleveland Fed anticipate consumer price inflation of 3.3% over the next 12 months, a decline from 3.7% in the prior quarter. The drop signals easing inflation pressures, though expectations remain above the Federal Reserve’s 2% target.
Wage growth projections held steady at 2.8%, nearly unchanged from last year’s 2.9%, while employment expectations showed little shift. The labor market outlook remains stable, with no signs of significant acceleration or deterioration.
The most notable change was in research and development spending, with firms now forecasting just 2.0% growth, down from 3.1% a year ago. The sharp slowdown suggests heightened caution amid elevated financing costs and economic uncertainty.