Inflation in April and May was over-predicted by consumer-based surveys ahead of the year.
Figure 1: Year-over-year CPI inflation (black), average expected from the Survey of Professional Forecasters (blue +), average expected from the Michigan Survey of Consumers (red), average from the NY Fed Survey of Consumer Expectations (green light), unit cost (chartreuse), all in %. The May 2024 view in Michigan is preliminary. The NBER has defined recession days as shaded in gray. Source: BLS, University of Michigan via FRED and, Philadelphia Fed Survey of Professional Forecasters, NY Fed, Atlanta Fed and NBER.
Year-to-date SPF is 2.51%, slightly above the 2.45% I estimate to correspond with 2% PCE deflator inflation. Interestingly, with average unit cost growth back around April 2018 levels, there is little evidence of wage growth.
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