Might’s ultimate numbers from the U.Michigan survey are out. Right here’s the image of a number of one-year-ahead anticipated inflation charges.
Determine 1: 12 months-on-year precise CPI inflation (daring black), and anticipated inflation from College of Michigan (crimson), NY Fed (gentle inexperienced), Survey of Skilled Forecasters (blue +), Coibion-Gorodnichenko SoFIE imply (sky blue squares), and unit price development charge (chartreuse), all in %. Supply: BLS, U.Michigan through FRED, Philadelphia Fed, Atlanta Fed, Cleveland Fed, and writer’s calculations.
Observe that one sequence doesn’t pertain to CPI, specifically the unit price sequence from the Atlanta Fed’s Enterprise Inflation Expectations survey. The truth that this sequence will not be outstripping anticipated inflation suggests the absence of a robust cost-price spiral.
Curiously, the SPF for Might is a full share level beneath the Michigan survey median. Whereas it’s typical for the SPF to learn beneath the Michigan (or NY Fed) measures, the SPF has been hitting nearer to precise in current quarters.
Curiously, the Survey of Agency Inflation Expectations (SoFIE) developed by Olivier Coibion and Yuriy Gorodnichenko stays larger than the buyer/family measures (these are means vs. medians reported earlier; see dialogue right here).
Backside line: whereas inflation expectations have risen in Might, they haven’t risen as a lot as thought earlier (U.Michigan ultimate is 3.3% vs. preliminary 3.5%). The Survey of Skilled Forecasters median at 2.5% is nearly on track for the CPI inflation charge implied by a 2% PCE deflator goal.
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