Median one-year-ahead inflation expectations fell from 6.8 percent in June to 6.2 percent, while median three-year-ahead inflation expectations dropped from 3.6 percent in June to 3.2 percent, said the survey.
Median five-year-ahead inflation expectations also declined by 0.5 percentage point to 2.3 percent in July.
Despite the monthly decline, inflation expectations are still very high by historical standards.
Expectations about year-ahead price increases for gas and food fell sharply, while home price growth expectations and year-ahead spending growth expectations continued to pull back from recent highs, the survey showed.
In late July, the U.S. Commerce Department reported that personal consumption expenditures (PCE), the Federal Reserve's preferred inflation measure, soared 6.8 percent in June over the past year, up from 6.3 percent year-on-year growth in May.
The PCE gauge, which takes into account how consumers change their behavior in light of higher prices, is another stark reminder that inflation has been persistently high.
Economists believe that a robust July job report, which was released Friday, will give the Federal Reserve the confidence it needs to push ahead aggressively with its fight against inflation.
"At least a 50-basis-point rate hike at the September 20-21 FOMC (Federal Open Market Committee) meeting seems likely at this point in time," Sarah House and Michael Pugliese, economists at Wells Fargo Securities, wrote in an analysis Friday.
Another 75-basis-point hike "could be in store" if inflation over the next two consumer price index reports shows no signs of trending lower, they added.
U.S. consumer inflation has remained over 8 percent since March this year, and surged 9.1 percent from a year ago in June, hitting a fresh four-decade high, the Labor Department reported earlier.
The consumer price index for July is scheduled to be released on Wednesday.
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