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Pessimism holds back consumers' view of 1-year inflation -NY Fed survey

NEW YORK, Oct 10 (Reuters) - Short-term inflation expectations among U.S. consumers were stuck near their lowest level since early 2016 in September as the one-year outlook on wages and family finances deteriorated, a New York Federal Reserve survey released on Tuesday showed.

Medium-term inflation expectations, however, rose last month.

"In particular, expectations about earnings, spending, income growth, home prices, financial situations and the stock market all deteriorated," the New York Fed said.

The more pessimistic view followed a September payrolls report that showed a surprisingly strong 0.5 percent gain in wages and the continued strong performance of Wall Street stock indexes.

The New York Fed report showed that expectations for inflation one year out were unchanged at 2.5 percent last month, holding near their weakest level since January 2016.

The three-year inflation expectations measure moved to 2.8 percent, up 0.2 percentage point from August.

Both measures have generally declined since the survey began in mid-2013, reflecting the years in which most U.S. inflation measures have fallen short of the central bank's 2 percent medium-term target.

In recent days, several Fed officials including Chair Janet Yellen have said the softness in domestic inflation is likely temporary, which may not deter the central bank from raising rates at its December policy meeting.

The New York Fed's internet-based survey is done by a third party and taps a rotating panel of about 1,300 household heads. (Reporting by Richard Leong; Editing by Paul Simao)