Consumer Inflation Expectations
Consumers grew more confident in July that inflation will be less of a problem in the coming years, with the three-year inflation outlook at a new low. The survey showed respondents expect inflation to stay elevated over the next year but then recede in the following years. The medium-term inflation expectations improved, with gas and food price increases expected to be lower than in previous months.
Key Points
- Three-year inflation outlook at a new low of 2.3%
- Gas and food price increases expected to be lower
- Improved confidence in employment despite rising unemployment rate
Pros
- Consumers expect inflation to decrease in the medium term
- Improved confidence in the labor market despite rising unemployment rate
Cons
- Rising expectations for costs of medical care, college education, and rent