Sunday , July 25 2021
Home / Econbrowser - James Hamilton / Some 1 Year Ahead Inflation Expectations — Households vs. Economists (again)

Some 1 Year Ahead Inflation Expectations — Households vs. Economists (again)

Summary:
Household forecasts are about 2 percentage points above those of economists. 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), WSJ July survey for June 2022 y/y inflation (light blue triangle). Source: BLS, University of Michigan via FRED, Reuters, Philadelphia Fed Survey of Professional Forecasters, NY Fed, Cleveland Fed, WSJ July survey. A reminder that — as all expectations of y/y inflation move up — consumer/household based expectations are higher than those from economists and other forecasters, and (as discussed here), upwardly biased. Michigan forecast discussed

Topics:
Menzie Chinn considers the following as important:

This could be interesting, too:

Menzie Chinn writes Some Trends in Real Wages

Menzie Chinn writes Inflation Expectations of Consumers

Menzie Chinn writes PPI and CPI for June

Eric Crampton writes Morning roundup

Household forecasts are about 2 percentage points above those of economists.

Some 1 Year Ahead Inflation Expectations — Households vs. Economists (again)

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), WSJ July survey for June 2022 y/y inflation (light blue triangle). Source: BLS, University of Michigan via FRED, ReutersPhiladelphia Fed Survey of Professional ForecastersNY Fed, Cleveland Fed, WSJ July survey.

A reminder that — as all expectations of y/y inflation move up — consumer/household based expectations are higher than those from economists and other forecasters, and (as discussed here), upwardly biased.

Michigan forecast discussed here.

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

Leave a Reply

Your email address will not be published. Required fields are marked *