The year-ahead inflation expectations of businesses  were 1.8 percent in October, according to the Federal Reserve Bank of Atlanta’s most recent business inflation expectations survey. The survey was conducted October 5–9, with 225 firms responding to questions about their business conditions and inflation outlook. The results are summarized below.
 
Year-ahead inflation expectations and current conditions

Respondents indicated that, on average, they expect unit costs to rise 1.8 percent over the next 12 months. Inflation uncertainty went unchanged at 2.3 percent. Firms also report that, compared to this time last year, their unit costs are up 1.3 percent. Respondents’ sales levels, compared to what they consider normal conditions, declined, with approximately 55 percent of respondents indicating current sales levels are at or above normal. Profit margins were virtually unchanged, with roughly 53 percent of respondents indicating their profit margins are at or above normal.
 
Quarterly question: Long-term inflation expectations

Over the long term—that is, per year over the next five to 10 years—respondents expect unit costs to increase 2.7 percent, on average, down one-tenth of a percentage point from the July reading. Respondents’ uncertainty (variance) regarding this expectation rose to 2.3 percent.
 
Special question

The question assessed the level of influence certain factors have on firms’ pricing decisions.
 
A majority of firms indicated that industry trends and labor costs have significant influence over their pricing decisions. Firms noted that the rate of inflation, margin adjustments, and productivity were factors that had the lowest level of influence on pricing decisions.