The BIE was created to measure the year-ahead inflationary sentiments of businesses in the Sixth District. It also helps inform our view of the sources of cost changes and provides insight into the factors driving business' pricing decisions.

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Business Inflation Expectations Unchanged at 1.7 Percent - July 2020

• Inflation expectations: Firms' year-ahead inflation expectations have remained the same at 1.7 percent, on average.

• Current economic environment: Sales levels and profit margins "compared to normal" continued to improve over the month, though they remain at historically low levels. Year-over-year unit cost growth decreased slightly to 1.1 percent, on average.

• Quarterly question: Firms' sales gap (percentage below "normal" unit sales levels) improved somewhat to 14.3 percent below normal, on average, compared to the last measure of 31.6 percent below normal taken in April.

• Special question: Firms provided an estimate of the number of months it will take until business returns to "normal," and the number of months they can continue to operate without accessing additional sources of funding. They also provided a rating of the extent to which the COVID-19 outbreak has impacted their sales activity and operations.