The previous year's consumer-based survey forecasts for April and May inflation were too high.
figure 1: Annual increase in CPI inflation (black), median expectations from the Professional Forecasters Survey (blue+), median expectations from the Michigan Consumer Survey (red), median expectations from the New York Fed Consumer Expectations Survey Number (light green), unit cost (yellow green), all expressed in %. The May 2024 Michigan observations are preliminary. NBER-defined recession peak-to-trough dates appear gray. Source: BLS, University of Michigan, via FRED, Philadelphia Fed Survey of Professional Forecasters, Fed, Federal Reserve Bank of Atlanta and the National Bureau of Economic Research.
The SPF value for the next five months is 2.51%, slightly higher than my estimate of 2.45% and consistent with PCE deflator inflation of 2%. Interestingly, with median unit cost growth back to levels around April 2018, there is little evidence of an upward spiral in wage prices.
