Business inflation expectations in the Atlanta Fed’s survey eased to 2.3% in October 2026 from 2.4% in September, signaling a modest decline in anticipated cost pressures. The October 21 release showed that businesses expected slower unit-cost growth over the next year, although expectations remained above their pre-pandemic average.
Key Takeaways
- Year-ahead cost expectations fell by 0.1 percentage point in October.
- Lower expected cost growth did not eliminate uncertainty about the outlook.
- Businesses projected lower employee turnover over the following 12 months.
Table of Contents
- Business inflation expectations measure firms’ own costs
- Lower expectations coexist with greater uncertainty
- Companies anticipate less employee turnover
- Conclusion
Business inflation expectations measure firms’ own costs
The Atlanta Fed’s Business Inflation Expectations survey measures anticipated changes in businesses’ own unit costs in the Federal Reserve’s Sixth District. It is a regional business survey, not a nationwide measure of consumer-price inflation.
That distinction matters when interpreting the October decline. The reading indicates that participating firms expect their costs to grow more slowly; it does not establish that prices paid by households have fallen or that actual inflation has slowed by the same amount.
The latest result extends a substantial retreat from the survey’s April 2022 peak. Even so, the gap above the pre-pandemic benchmark shows that expected cost growth has not fully returned to its earlier norm.
| Item | Details |
|---|---|
| October 2026 | Year-ahead unit-cost expectations: 2.3%. |
| September 2026 | Year-ahead unit-cost expectations: 2.4%. |
| April 2022 peak | Year-ahead unit-cost expectations: 3.8%. |
| January 2017–December 2019 | Average year-ahead unit-cost expectations: 2.0%. |
Lower expectations coexist with greater uncertainty
Uncertainty about year-ahead unit costs has increased since reaching a low in February. A lower average forecast and greater uncertainty can coexist: firms may anticipate less cost growth overall while becoming less confident about the range of possible outcomes.
Longer-term cost expectations also remained above pre-pandemic levels across most major industries. Those expectations matter because businesses consider future labor and input costs when making pricing, hiring and investment decisions.
The October improvement therefore provides a narrower signal than an all-clear on inflation. It describes a modest change in business expectations, rather than an announced change in Federal Reserve policy.
Companies anticipate less employee turnover
Most surveyed businesses said employee turnover had been relatively stable over the previous year. Looking ahead 12 months, the average firm expected monthly turnover to decline by roughly two percentage points to 5.6%.
That is a forecast of employee movement, not a realized decline or a direct measure of wage growth. It adds a labor-market dimension to the survey without establishing how quickly compensation or overall business costs will change.
Conclusion
October’s decline points to slightly cooler expected business costs, with uncertainty still limiting the signal. The next scheduled Atlanta Fed survey release, on November 18, 2026, will provide the next reading on whether that easing continues.
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