Jaison R. Abel and Richard Deitz

Shortly after the recovery from the pandemic recession began, the U.S. economy entered a period of high inflation as surging demand, severe supply disruptions, and worker shortages combined to create large imbalances and inflationary pressures in the economy. More recently, however, inflationary pressures have been moderating. Indeed, the inflation rate as measured by the consumer price index (CPI) has come down from its recent peak of 9.1 percent in the summer of 2022 to 3.1 percent at the start of 2024. Have inflationary pressures also moderated for local businesses in the New York–Northern New Jersey region? The New York Fed’s February business surveys asked firms about increases in their costs and prices. Results indicate that the pace of increase in costs, wages, and prices have all slowed considerably over the past year. Moreover, firms in the region expect cost and price increases, as well as the overall inflation rate, to moderate further in the year ahead.