![Inflation Rate - Actual vs Expected [OC]](https://www.byteseu.com/wp-content/uploads/2025/09/caxnuday8qqf1-1024x831.jpeg "Inflation Rate – Actual vs Expected [OC]")
Graph from my blog, PoliMetrics.
See link for full analysis, additional graphs, commentary: https://polimetrics.substack.com/p/consumer-sentiment-and-inflation
Data from University of Michigan/Bureau of Labor Statistics. Graph made with Claude.
Posted by Public_Finance_Guy
14 Comments
funny how people basically always expect inflation to be higher than it actually is, except when shit really hits the fan (’08 crash, covid spike)
Didn’t know there was some deflation in 2008-09. Probably in part why it was so catastrophic
Hmmm. This cant’ be right, it’s clearly an attempt by some Democrat to cast President Trump in a bad light. We should fire this person and replace them with a Loyal Partyman who will get the chart right.
wild how far consumer expectations deviated from what was actually happening with the economy in ~~2024, almost seems like a lot of people were spending a lot of money to convince the public that everything was awful, for some reason~~
whoops, see below
This is very interesting, challenges some commonly held perceptions
>United States Michigan Consumer Sentiment. The Index of Consumer Expectations focuses on three areas: how consumers view prospects for their own financial situation, how they view prospects for the general economy over the near term, and their view of prospects for the economy over the long term.
>Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services
Your title seems to conflate these two concepts.
CPI is not a forecast of inflation — it is inflation (or deflation) already observed in consumer prices.
ICE does not directly measure “expected inflation.” Instead, it captures sentiment about financial well-being and the economy in general. People may have concerns about inflation, but the index is broader: it includes job security, income prospects, and macroeconomic outlook.
Consumer Prices vs. Consumer Sentiment is a better title.
great work! consider adding a negative y axis 🙂
This is an entire waste of time and resources
We should delete the entire concept of this because it is corrosive to the fabric of reality and replace it with money that tracks births and deaths like what would happen in a society that did things based upon simple logic and reason.
But unfortunately we are ruled by people who think following internet trends (or the whims of a few people with too much money and not enough reality) that change with the whims of a few morons on Reddit – literally, as was proved recently, though I am not going to show my work – instead of, to reiterate, simple logic and reason.
So we’re all being price gouged
How does this graph make any sense? It’s comparing what the inflation did compared to [last year](https://www.bls.gov/opub/ted/2025/consumer-prices-up-2-9-percent-from-august-2024-to-august-2025.htm), to what people think (median value from a survey) the inflation will be [next year](https://data.sca.isr.umich.edu/get-special-chart.php?n=79452&f=pdf&k=1f30cb10b272574228e5c31c15f7049c45469e29fd86aa06a31e82e1c7830286) (compared to now). The timelines clearly aren’t adjusted in the graph, so it’s not even comparing the same timeframe.
I don’t think the BLS numbers are accurate any more. They’ve fired most of the people that collect data, as well as the people that report the data.
I have a really hard time believing that inflation is below 3% right now. The fact that they changed how it’s calculated back in April to “impute” more prices rather than measure them directly doesn’t give me a lot of confidence. At the grocery store it feels like 2022 all over again. Every week is more expensive than the last.
My take. Companies filled warehouses in anticipation of tariffs, thereby delaying the impacts the public was expecting.
Many also have absorbed some/all of the tariffs skewing actual/exp; but they’ve all about hit their limit to do so.
TACO is all shell and no meat. No one knows what the actual tariff rates impacts will be long term, nvm daily or on what products, but we know it ain’t good. So there is a lot of confusion among consumers that is informing expectations; which imo is by design so he can declare tariff victory sans evidence.
No one talks about the trump panic economy. Who here has run out and made purchases in anticipation of higher costs? Ive made all my needed (high $) panic purchases and I suspect just about everyone else has as well.
Looks like the expected graph should be shifted over a year to the right since they are predicting what inflation will be in a year, not what it is today. Also, it should probably include the market expectation with the 1 year breakeven inflation rate.