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US consumers’ economic outlook eased further in August, as inflation and home price growth expectations declined, an improvement that is still unlikely to lead the US central bank to loosen monetary policy at its next meeting.

Consumers’ inflation expectations over the next 12 months fell to 5.7 per cent in August from 6.2 per cent in July, while the three-year inflation expectation measure fell to 2.8 per cent from 3.2 per cent, according to the Federal Reserve Bank of New York’s survey of consumer expectations.

“Perceptions about households’ current financial situations compared to a year ago improved, with fewer households reporting a worse situation compared to a year,” the bank’s economists said.

The improving outlook comes ahead of Tuesday’s release of the closely watched consumer price index for August, which is expected to report a second consecutive monthly decline in the annual rate of inflation.

But the recent improvement is probably still not enough to deter the Federal Reserve from implementing a third consecutive 0.75 percentage point increase it its policy meeting later this month, as Fed chair Jay Powell said last week that the US central bank would act “forthrightly” to make sure elevated inflation does not become entrenched.

Consumers are more optimistic that petrol prices and home prices, two big drivers of inflation over the past few months, will not significantly increase in the year ahead.

Expectations around home price growth fell to…