Sep 14, 2021 - Economy

Consumer inflation expectations continue to rise

Data: New York Fed; Chart: Axios Visuals

Americans expect stuff to get a lot pricier.

Why it matters: Even though inflation may not actually rise to expected levels, the expectations alone can affect behavior.

  • “Some research shows when consumers expect higher inflation they pull back on spending,” MacroPolicy Perspectives founder Julia Coronado said.

By the numbers: According to the New York Fed’s August Survey of Consumer Expectations, respondents see the rate of inflation rising to 5.2% a year from now, up from 4.9% in last month’s survey.

  • Three years from now, the inflation rate is expected to be 4.0%, up from 3.7% last month.
  • Both figures represent the highest readings since the survey began in 2013.

State of play: Business anecdotes continue to confirm that inflation remains a challenge.

  • “Unfortunately, inflation is higher than we even thought in the third quarter,” 3M CFO Monish Patolawala said at a Morgan Stanley conference on Monday. “Despite taking price up … we are seeing inflation outstrip price.”

What to watch: The August Consumer Price Index report, which will be published at 8:30 ET this morning, will give a fresh update on what inflation looks like today.

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