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 3.4 Percent - January 2022

• Inflation expectations: Firms' year-ahead inflation expectations remain unchanged at 3.4 percent, on average.

• Current economic environment: Sales levels and profit margins "compared to normal" remain relatively unchanged. Year-over-year unit cost growth increased slightly to 3.7 percent, on average.

• Quarterly question: Firms' sales gap (percentage below "normal" unit sales levels) increased significantly to 1 percent above normal and remain at historically high levels.

• Special question: Firms were asked to decompose their share of labor force by skill level. They were then asked to estimate the average hourly wage by skill level. Finally, they provided the expected wage growth over the next 12 months for each skill level. A breakdown of the results can be found in the special question section below.