One-Year CPI Inflation Expectations

Slight bump up in March/April expectations, but still down relative to mid-2022.

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), SoFIE mean from Coibion-Gorodnichenko firm expectations survey [light blue squares], all in %. Michigan March observation is preliminary. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, University of Michigan via FRED and Investing.comPhiladelphia Fed Survey of Professional ForecastersNY FedCleveland Fed and Coibion and Gorodnichenko, and NBER. 

The data are here (XLSX).

The consumer surveys (Michigan, NY Fed) suggest a slightly uptick. This is also reflected in economists’ views, at least as represented by the WSJ April survey.

Source: WSJ, 15 April 2023.

Note that June ’24 is about as close as one can get to March 2024 (which corresponds to the to the last Michigan and NY Fed surveys). There’s a 16 bps increase in y/y expected inflation through June 2024, going from the January to April surveys.



10 thoughts on “One-Year CPI Inflation Expectations

  1. Macroduck

    Core CPI topped the median estimate in January, February and March. At least some of the increase in y/y inflation expectations is simply the math of a higher than expected base for core inflation. By the time that base effect drops out, the difference between the January and April forecasts is small.

  2. Ivan

    In other words none of these entities have models that are worth much. My question is why are they so bad at this? What components of inflation did they get sort of right and which were the most disastrous misses? Was it the gyrations in energy prices that threw them off? Were their models so far off because they are not able to calculate inflation driven by supply chain shocks with associated temporary pricing power (and the price reductions when that power disappear) ?

    1. JohnH

      “My question is why are they so bad at this?”

      If you don’t know where you’re going, you might not get there. And if you choose to ignore a major driver of inflation (one with the means, the motive and the opportunity to increase prices faster than costs), your inflation forecast might not be very good.

        1. JohnH

          pgl just can’t acknowledge that Corporate America is in part responsible for driving inflation…so he just hurls insults.

          Come on, pgl, it’s easy! Just say “Corporate America helped drive inflation.” But that’s not something a corporate shill coould ever say!

      1. pgl

        “inflation forecast might not be very good”.

        From the lost clown who keeps saying he expects inflation to be 6%! How’s that been working out for you over the past 9 months little Jonny?

      2. pgl
        National income: Corporate profits before tax

        Maybe little Jonny boy does not realize that corporate profits have fallen over the past 2 quarters. Oh – wow. We now know why Jonny’s 6% inflation forecast has not materialized. Little Jonny has no clue what has been happening over the past 9 months. Fancy that!

        1. JohnH

          Oh dear! Corporate profits have fallen a bit.

          pgl, the corporate shill, won’t tell you that the fall was back to the stratospheric level of 1Q2022. Quel dommage!

  3. pgl

    Is CoRev and Marjorie Taylor Greene the same person?

    In trying to play down the threat posed by a warming planet, Greene wrote a lengthy, nonsensical post that did not even attempt to discuss the actual science behind climate change. “If you believe that today’s ‘climate change’ is caused by too much carbon, you have been fooled,” she wrote. “We live on a spinning planet that rotates around a much bigger sun along with other planets and heavenly bodies rotating around the sun that all create gravitational pull on one another while our galaxy rotates and travels through the universe. Considering all of that, yes our climate will change, and it’s totally normal!”

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