Forecast errors from the end of last year are essentially zero.(Click on image to enlarge)
Figure 1: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected from Michigan Survey of Consumers (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink), all in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, University of Michigan via FRED and, , , and NBER. Who was overestimating inflation a year ago?(Click on image to enlarge)
Figure 2: Forecast errors from Survey of Professional Forecasters (blue +), from Michigan Survey of Consumers (red), NY Fed Survey of Consumer Expectations (light green), Cleveland Fed (pink), all in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, University of Michigan via FRED and , , , , NBER and author’s calculations.While the SPF and Cleveland Fed measures underpredicted inflation through 2021-22, they are about on track as of November/December. In contrast, the household measures overpredicted inflation.More By This Author:
Inflation Expectations Down
