US Year-Ahead Inflation Expectations Revised Lower

Year-ahead inflation expectations in the US, measured by the University of Michigan Surveys of Consumers, were revised slightly down to 4% in August 2026 from the preliminary estimate of 4.3% and below July's 4.2%. The reading marked a third straight monthly decline and the lowest level since March. Longer-run inflation expectations, measured over a five-year horizon, held at 3.3% for a third consecutive month, in line with the earlier estimates.

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.