Alleviating numbers on inflation perceptions were released last week by the US Census Bureau showing American households’ fears of sticky high prices did not increase in the short term. Census Bureau surveyors asked people about expected increases in prices for the next six months. The answers to the question almost remained unchanged, from 31% of respondents stating they were “Very Concerned that prices will increase in the next six months” to 29% in the August-September data. The Pulse Survey run between August 20th and September 16th revealed a decrease of six percentage points in the category “I think prices have increased.” July’s 2024 data showed that 62% of respondents stated prices had increased; while August and September data showed the same answer dropped to 56%.

The message we read from the current release is that prices remain sticky as they have been for the entire summer of 2024. Likewise, this release shows that the message the Federal Reserve has been sending is being adopted by American households, which can be seen as a major victory for monetary policy managers at the Fed, as expectations do anchor well on households. Nevertheless, surveyed people still feel the stress of inflation. July’s 2024 and August-September 2024 show that reality price-wise has not changed much. All answers to the question “How stressful, if at all, has the increase in prices in the last two months been for you?” remain virtually unchanged from release to release.

Concerns about prices six months ahead overlap with the Christmas shopping season. If the season pulls prices up, 2025 will look dubious for any of the shoppers out there, including those who entertain Census Bureau Survey Staff….

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