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One Year Ahead Expected CPI Inflation Rates

Summary:
Coming down for June, according to the University of Michigan survey of consumers. Figure 1: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected from Michigan Survey of Consumers (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink). Source: BLS, University of Michigan via FRED, Reuters, Philadelphia Fed Survey of Professional Forecasters, NY Fed, and Cleveland Fed. The household survey measures are typically higher than those based on surveys of economists. Hence, looking at changes is perhaps more informative about how inflation sentiments have changed. From November to June, the Michigan (survey) measure has risen 1.2 percentage points, while the Cleveland Fed

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Coming down for June, according to the University of Michigan survey of consumers.

One Year Ahead Expected CPI Inflation Rates

Figure 1: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected from Michigan Survey of Consumers (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink). Source: BLS, University of Michigan via FRED, Reuters, Philadelphia Fed Survey of Professional Forecasters, NY Fed, and Cleveland Fed.

The household survey measures are typically higher than those based on surveys of economists. Hence, looking at changes is perhaps more informative about how inflation sentiments have changed.

From November to June, the Michigan (survey) measure has risen 1.2 percentage points, while the Cleveland Fed (hybrid market/survey) measure has risen only 0.6 percentage points.

The gap between the Michigan measure and the SPF has widened to its largest since May/June 2008 surveys — 2.2 percentage points (for May, the last survey for the SPF).

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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