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First Cut: Atlanta Fed Business Inflation Expectations on the rise in June

The Atlanta Fed’s Business Inflation Expectations survey for June put expected inflation at 1.7%, up from 1.5% in May. Recent declines in oil and other commodity prices seem to have bottomed out and mild upward price pressures are expected to resume. While it isn’t quite up to the Fed’s 2% inflation objective, it is within reach of it. Consumer price expectations seem to be moving in that direction as well.

Of interest in the June survey were two questions about whether the business had requested and received financial assistance from Federal government programs since March 13, 2020.

Responses indicated that a large share had requested assistance, with the bulk of it in the Paycheck Protection Program (PPP) at 42.12%. The second largest response was that the business had not requested assistance at 22.71%.
Among those how had received assistance, 57.45% had gotten Federal help. Of the respondents 54.53% was from the PPP.

Ancillary to the special questions was a table that noted that the mean share of assistance requested and received was 87.04%, while the mean share of those anticipating the assistance will be forgiven is 86.91%.

In short, lots of applications, lots of approvals, and lots of expectations that the money won’t have to be repaid.

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