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UMich Survey Shows Gas, Pump Prices A Driver For Higher Inflation Expectations


University of Michigan Sentiment (Nov F) M/M 61.3 vs. Exp. 61.0 (Prelim. 60.4)

  • Current Conditions 68.3 (Prelim. 65.7)
  • Expectations 56.8 (Prelim. 56.9)
  • 1-year Inflation Expectations 4.5% vs. Exp. 4.4% (Prelim. 4.4%)
  • 5-10-year Inflation Expectations 3.2% vs. Exp. 3.1% (Prelim. 3.2%)

Both 1yr and 5-10y inflation expectations revised 0.1ppts higher - against market expectations. Helping add to the USD bid and pushing EUR/USD to new pullback lows as US 10y yield re-top 4.40%.

Looks like concern over gas and pump prices were largely responsible for those higher inflation expectations:

  • Inflation expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation. At this time, consumers appear worried that the softening of inflation could reverse in the months and years ahead.Despite easing prices at the pump, one-year gas price expectations rose to its highest reading since June 2022, and five-year gas price expectations are their highest since March 2022.
  • About 25% of consumers reported hearing negative news about labor markets, up from 20% last month and the highest reading since May 2023.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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