April 2021 Survey Of Consumer Expectations: Inflation Expectations Increase In The Short-Term

from the New York Fed

The Federal Reserve Bank of New York's Center for Microeconomic Data released the April 2021 Survey of Consumer Expectations, which shows that median inflation expectations increased at the short-term horizon but remained unchanged at the medium-term horizon. Median year-ahead home and rent price growth expectations also increased, with both reaching new series highs. Households' year-ahead spending growth expectations remain elevated.

The main findings from the April 2021 Survey are:


  • Median year-ahead inflation expectations increased to 3.4% in April from 3.2% in March, while remaining unchanged at 3.1% at the three-year horizon. The one-year ahead measure is now at its highest level since September 2013. Our measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) declined at the one-year horizon and was unchanged at the three-year horizon, with both measures remaining elevated relative to pre-COVID-19 levels.
  • Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—decreased at both horizons.
  • Median home price change expectations, which have been trending upward since reaching a series' low of 0.0% in April 2020, increased sharply from 4.8% in March to 5.5% in April, a new series high. The increase was broad-based across age, education and income groups, and was largest in the South and Northeast.
  • The median one-year ahead expected change in gas prices retreated from its series high of 9.9% in March to 9.2% in April. Similarly, median expectations regarding changes in the cost of medical care decreased from 9.3% in March to 9.1% in April. Expectations about the cost of rent and a college education instead increased from 9.3% and 5.6% in March to 9.5% and 5.9% in April, respectively. The increase in rent growth expectations is the fifth consecutive increase, and the current reading is a new series' high.
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