United States Inflation Expectations

US consumer inflation expectations for the year ahead remained at a record 6% in December of 2021, the same as in November. Home price expectations rose to 5.5% from 5% in November but remained below their May 2021 peak. Also, uncertainty and disagreement about future inflation decreased and expectations about year-ahead price changes fell by 3.5 percentage points for the price of gas (to 5.7%), 1.4 percentage points for food (to 7.8%), and 1.0 percentage point for the cost of a college education (to 8.1%). At the same time, households reported increased optimism about their labor market prospects, with earnings growth, job loss, and job finding expectations all improving. Households' income growth expectations also improved, rising to a new series high. Meanwhile, the medium-term three-year inflation expectations were also steady at 4%.