US 1-Year Inflation Expectations at Near 1-Year Low

Year-ahead inflation expectations in the US, measured by the University of Michigan Surveys of Consumers, inched higher to 4.3% in August of 2026 from 4.2% in the previous month, according to a preliminary estimate. The result was mostly owed to the impact of higher energy prices as the war in Iran limited oil and fuel supply from the Middle East. Longer-run inflation expectations, measured by expectations of inflation in a five-year outlook, were at 3.3% for the third month.

Year-ahead inflation expectations in the United States, as measured by the University of Michigan survey, fell for a second consecutive month to 4.2% in July 2026, the lowest level since March, down from 4.6% in June and in line with the preliminary estimate. Even so, expectations remained well above the 3.4% recorded in February, before the outbreak of the Iran conflict, and above all readings seen throughout 2024. Meanwhile, the five-year inflation outlook stood at 3.3% in July, matching both June's reading and the preliminary estimate. Nevertheless, it remained slightly above the 2.8%-3.2% range that prevailed throughout 2024.

The year-ahead inflation expectations in the United States, as compiled by the survey of the University of Michigan, fell for the second month to 4.2% in July 2026, the lowest since March, down from 4.6% in June, preliminary estimates showed. Still, the figure remained well above the 3.4% recorded in February, before the Iran conflict began. In the meantime, the five-year inflation outlook stood at a three-month low of 3.3% in July, unchanged from June.