US Consumer Inflation Expectations Jump to Highest Since 2008

Ann Arbor: So, it looks like US consumers are feeling pretty anxious about inflation these days. According to a recent survey, their long-term inflation expectations have shot up to the highest point since 2008. This jump is mainly due to worries about potential tariffs from the incoming Trump administration.

In fact, Americans now expect prices to rise at an annual rate of 3.3% over the next five to ten years. That’s up from 3% just last month! They also think costs will go up by 3.3% in the next year, which is a half-point increase from December.

Because of this, the sentiment index dipped a bit to 73.2. The survey gathered responses from mid-December to early January, so it’s pretty fresh data.

Interestingly, nearly a third of consumers mentioned tariffs as a concern, which is a big jump from 24% in December. Before the election, it was less than 2%! Many believe these tariff hikes will lead to higher prices for everyday goods.

Inflation worries are hitting various groups, especially lower-income folks. Plus, 22% of people said buying big-ticket items now could help them dodge future price increases. That’s the highest level since 1990!

While uncertainty about inflation has grown over the past year, it’s still not as high as it was back in the 1970s. The overall consumer expectations index fell to a six-month low, with many expecting unemployment to rise soon.

It’s also interesting to see how political views are affecting these sentiments. Republicans have seen a big boost in their outlook since Trump’s win, while Democrats are feeling a bit more pessimistic.

On a brighter note, the current conditions gauge did improve a bit, rising to 77.9 from 75.1 in December. So, there’s a mix of feelings out there!