Consumer Inflation Expectation

Consumer Inflation Expectation is the New York Fed Survey of Consumer Expectations (SCE), run by its Center for Microeconomic Data since June 2013. It is a monthly internet survey following a rotating panel of about 1,300 household heads, or the person who owns, buys or rents the home. Respondents come from the Consumer Confidence Survey, and new entrants match American Community Survey targets. Panelists stay up to 12 months with steady rotation.

The Demand Institute fields the survey. It is a non-profit jointly run by the Conference Board and Nielsen. It measures forward expectations, or beliefs about future prices, not actual inflation, unlike Michigan which asks about prices in general.

The survey runs monthly, and each release covers the month just ended on the 2nd Monday at 11:00 AM Eastern. Each release includes a press release, interactive charts by subgroup with underlying data, and occasional blog analysis. Monthly microdata follow after 9 months and housing microdata after 18 months. There is no routine revision schedule, and readings use levels and percentage point changes, with no fixed threshold.

A 1 year rise with flat longer gauges stays anchored. Joint rises warn of de-anchoring. Disagreement, or spread, differs from uncertainty, or doubt.

The headline moves with salient price beliefs, job prospects and household finance expectations.

• 1 year ahead inflation: median expected inflation rate over next 12 months, the headline figure.
• 3 year and 5 year ahead inflation: median expectations for later horizons, used as anchor gauges for policy credibility.
• Commodity prices: 1 year ahead medians for gas, food, rent, medical care and college costs.
• Home prices: 1 year ahead median expected change in average US home price, often moving against the headline.
• Jobs and pay: expected earnings growth plus mean, or average, chances of higher unemployment, job loss, quitting and finding work.
• Household finance and uncertainty: income, spending, credit access, taxes, savings and stock views plus debt risk, spread and doubt gauges.

The June 2022 survey, released July 11, 2022, showed 1 year expectations up to 6.8% from 6.6%, a new series high. Medium and longer gauges fell, with 3 year down to 3.6% from 3.9% and 5 year down to 2.8% from 2.9%.

Disagreement, or spread across people, rose at 1 year and was flat at 3 year. Uncertainty, or individual doubt, hit a new 1 year high and was flat at 3 year. Expected home price growth dropped sharply to 4.4% from 5.8%, moving hard against the headline. Gas rose to 5.6%, rent to 10.3% and food to 9.2%.

1. Point forecast: respondents first choose inflation or deflation, or falling prices, then give their best guess percent rate.
2. Density forecast: each person splits 100% chance across 10 bins from 12% or higher inflation to 12% or higher deflation.
3. Fit and respondent mean: a generalized Beta curve is fitted to each 10 bin answer, and its mean, or average, becomes that person's expected rate.
4. Headline median: the published figure is the weighted median of all respondent means, with interpolation, or estimated midpoint, for rounded answers. For example, means of 4.6%, 2.1% and 3.0% give a 3.0% median.
5. Weights: post stratification weights, or adjustments after sampling, match income, education, region and age to Census targets.
6. Disagreement and uncertainty: disagreement is the interquartile range across people and uncertainty is the median of personal ranges, with no seasonal adjustment.