the onset of the pandemic, roughly double the 9 percent increase in average hourly earnings by employees in that sector. 9 in the auto sector, where the real inventory - to - sales ratio is 20 percent below its pre - pandemic level, the retail margin for motor vehicles sold at dealerships has increased by more than 180 percent since february 2020, 10 times the rise in average hourly earnings within that sector. 10 so there is ample room for margin recompression to help reduce goods inflation as demand cools, supply constraints ease, and inventories increase. despite the higher prices for a broad set of goods and services, market - and survey - based measures of longer - term inflation expectations are within ranges consistent with expectations that inflation will return to 2 percent over the medium term. 11 treasury see, for example, josh ulick and suzanne kapner ( 2022 ) “ from walmart to gap, which retailers have the most excess inventory? ” wall street journal, june 9, https : / / www. wsj. com / articles / from - walmart - togap - which - retailers - have - the - most - excess - inventory - 11654776000. for additional information, see alana semuels ( 2022 ), “ i paid $ 3, 000 above sticker price for my new car. you probably will too, ” time, september 29, https : / / time. com / 6218046 / new - car - prices - over - msrp. although the survey of professional forecasters saw large increases in expected inflation for 2022 and 2023 between the first - and third - quarter surveys, reflecting the shocks to inflation between the periods in february and august when those surveys were conducted, the implied 5 - to - 10 - year inflation expectation - 6inflation - protected securities – based measures of five - year, five - year - forward breakeven inflation compensation are currently at 2. 15 percent, roughly 10 basis points below their level at the start of the year. the median of inflation expectations over the next 5 to 10 years in the michigan survey ticked down in september to 2. 7 percent, below the 2. 9 to 3. 1 percent range in which it had been fluctuating since july 2021 and back within the range that was common before the 2015 decline in this metric. 12 currently, there is a greater dispersion than usual of views about future inflation in survey

, which may imply a more subdued pace of consumer spending going forward than had been projected. market expectations for the level of the policy rate at the end of the year are now more than twice as high as they were just seven months ago. as a result of the significant increase in interest rates and associated tightening in broader financial conditions, i now expect that the second - half rebound will be limited, and that real gdp growth will be essentially flat this year. 3 the moderation in demand due to monetary policy tightening is only partly realized so far. the transmission of tighter policy is most evident in highly interestsensitive sectors like housing, where mortgage rates have more than doubled year to date and house price appreciation has fallen sharply over recent months and is on track to soon be flat. in other sectors, lags in transmission mean that policy actions to date will have their full effect on activity in coming quarters, and the effect on price setting may take longer. the moderation in demand should be reinforced by the concurrent rapid global tightening of monetary policy. against the backdrop of slower output growth, we are seeing some tentative signs of rebalancing in the labor market. anecdotal reports suggest the availability and both the summary of economic projections ( sep ) and private forecasters showed expectations of abovetrend 2022 growth early this year. the march sep showed a median projection of 2. 8 percent gdp growth in 2022 and a policy rate path that almost reached 2 percent by year - end. in the march 2022 blue chip economic indicators, the consensus projection for q4 / q4 real gdp growth in 2022 was 2. 6 percent, and policy expectations for year - end 2022 in the blue chip financial forecast for the same month were 1. 3 percent. on a q4 - over - q4 basis, the september blue chip consensus for 2022 real gdp growth was a decline of 0. 1 percent. the median expectations for real gdp growth on a q4 - over - q4 basis in the september sep were 0. 2 percent. - 3retention of workers are improving. 4 for the second month in a row, growth in monthly payroll employment stepped down, slowing from 315, 0000 in august to 263, 000 in september. there was a sharp 1. 1 million decline in job openings from july to august in the job openings and labor turnover survey ( jolts ). the ratio of job openings to job seekers declined to 1. 7 ; for purposes