Business Inflation Expectations (BIE)
Frequently Asked Questions
1. What is the purpose of the survey?
Inflation expectations are a critical component of the inflation outlook and, ultimately, the achievement of price stability. But our understanding of inflation expectations is limited, in part as a consequence of imperfect measurement. In 2007, Fed Chairman Ben Bernanke challenged researchers with the following: "Do we need new measures of expectations or new surveys? Information on the price expectations of businesses—who are, after all, the price setters in the first instance—as well as information on nominal wage expectations is particularly scarce." Indeed, our measures of firms' inflation expectations are generally anecdotal. We intend to help fill that void with our Business Inflation Expectations Survey.
2. How is the survey conducted?
Each month, on the Monday during the week of the consumer price index release, panelists receive an e-mail with a secure link to the online survey. The survey is open through 6 p.m. Friday of that week.
3. Who participates in the survey?
Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.
4. How are expectations calculated?
Each panelist is asked to assign a probability to six potential outcomes for unit costs over the upcoming 12 months. The probabilistic mean of these outcomes represents the panelists' year-ahead expectations for unit costs.
5. How is inflation uncertainty calculated?
The same probability data used to construct year-ahead inflation expectations are also used to compute inflation uncertainty. The variance of a panelist's probability data represents that individual's uncertainty about the inflation outlook. The average of these variances represents inflation uncertainty for the panel as a whole.
6. What is the schedule of releases?
The survey period runs from Monday to Friday, typically at midmonth. Survey release dates are scheduled for the following Wednesday, except in cases where the release would conflict with the Federal Open Market Committee (FOMC) blackout period, which begins at midnight ET the second Saturday before meetings of the FOMC and lasts until midnight ET the day after a meeting ends. In such cases, the release is changed to respect the FOMC's communications guidelines.
View the schedule of release dates for the coming year.
7. What is the purpose of "special questions"?
In addition to gauging firms' price-setting environment and year-ahead unit cost expectations, the Atlanta Fed uses the survey to investigate issues of longer-term interest for research and policy. Frequently, we will ask a "special question" designed for this purpose. View the archive of special questions and the responses from our panel.