Consumer Inflation Expectations Reach Record Highs

Consumers’ inflation expectations reached record highs in August, according to the latest data from the New York Federal Reserve…(NYFED)

  • Inflation expectations for a year from now increased by 0.3 percentage points to 5.2% in August. This is the tenth consecutive monthly increase and a new series high.
  • Median inflation expectations at the three-year horizon also increased by 0.3 percentage points to a new series high of 4.0%

Consumers expect rents to see the biggest jump with a 10% year-over-year increase followed by medical care (+9.7%), gasoline (+9.2%), and food (+7.9%)

  • Median year-ahead home price change expectations decreased slightly to 5.9% in August from 6.0% in July, marking the third consecutive monthly decline.

NOTE: Consumers expect earnings growth to fall 0.4 percentage points in August to 2.5% but they are slightly optimistic about household income as they predicted an 0.1 percentage point increase to 3.0%, a new series high.