Methodology

About the Data

The Price and Inflation Expectations Survey (PIES) collects data on how firms in the Third District expect prices to change in the near and long term. The Federal Reserve Bank of Philadelphia conducts this survey to better understand firms’ expectations of different measures of inflation. Responses are collected once a quarter through a set of special questions appended to the existing monthly Manufacturing (MBOS) and Nonmanufacturing Business Outlook Surveys (NBOS), specifically in February, May, August, and November. PIES began in the fourth quarter of 2015 and has been collected on a quarterly basis since then.

Survey Design

PIES is a set of five questions. Firms are asked to list their expected annual percent change with respect to the following:

One-Year Inflation Expectations

For your firm:

1. Prices your firm will receive (for its own goods and services sold) over the next year
2. Compensation your firm will pay per employee (for wages and benefits) over the next year

For U.S. consumers:

3. Prices U.S. consumers will pay (for goods and services) over the next year

Last Year’s Price Change

For your firm:

4. Prices your firm did receive (for its own goods and services sold) over the last year

Ten-Year Inflation Expectations

For U.S. consumers:

5. Prices U.S. consumers will pay (for goods and services) over the next 10 years¹

Respondents provide point estimates for each question (including decimals if desired) and may leave a question blank if they choose not to provide a response.

Summary of Responses

PIES results present 10 percent trimmed means and medians to summarize the firms’ responses to each question. For each question: first, we combine the responses from the MBOS and the NBOS participants (“all firms” sample), then we remove extreme values (larger than 1,000 and smaller than -1,000), and then we trim, or remove, the top 5 percent and the bottom 5 percent of responses from the “all firms” sample. The mean and median of the remaining “all firms” sample are the trimmed mean and the trimmed median for a given question. To derive the means of the manufacturing and nonmanufacturing firms’ responses, simple averages for each group are calculated from the “all firms” sample. The “all firms” sample is also used to calculate the medians for manufacturing and nonmanufacturing firms.