Asked where they expected oil prices to be in one year, compared with the price of about $119 a barrel at the time of the survey, 67% of all respondents said they expected the cost to be higher. Just 14% predicted a lower price and 14% said they expected the price to be "about the same."
On Tuesday, crude oil futures in New York closed just shy of $126 a barrel.
Worries about oil may be driving concerns about overall inflation: 61% of respondents said they expected inflation to rise over the next year from the current annualized rate of about 4%. Just 11% expected inflation to be lower, and 23% said they expected the rate to be about the same.
Inflation "just seems to be going up, but my husband's paycheck stays the same," said 57-year-old Mary Murrow of Wichita, Kan.
The Federal Reserve cut its benchmark short-term interest rate to 2% April 30 from 2.25%, the seventh reduction since September, as policymakers have tried to ease the housing-centered credit crunch and bolster the weak economy. But the Fed hinted that the latest cut could be its last.
The central bank is concerned that its rate reductions could help fuel inflation pressures, and that an inflation mentality could take hold among consumers, altering their behavior -- for example, by encouraging them to buy goods they believe will only become more expensive. That could make higher prices self-fulfilling.
"That's an issue out there," said Gary Schlossberg, an economist at Wells Capital Management in San Francisco, noting recent episodes of rice hoarding by customers of some U.S. retailers. What's more, he said, although global competition has kept U.S. prices relatively restrained apart from the food and energy sectors, that could change if the cost of imported goods continues to rise, giving American companies less reason to hold the line on their own prices.
The Fed warned in its post-meeting statement April 30 that "some indicators of inflation expectations have risen in recent months" and that "uncertainty about the inflation outlook remains high."
The Times/Bloomberg poll, conducted under the supervision of Times poll director Susan Pinkus, has a margin of sampling error of plus or minus 3 percentage points.
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tom.petruno@latimes.com
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Price of oil, inflation expectations
The majority of Americans believe oil prices will be higher in a year, and that expectation may be deepening inflation worries as well, according to a Los Angeles Times/Bloomberg poll.
