"Limited Attention" and Inflation Expectations of Households, Accessible Data
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Figure 1: Median of Households' Expected Change in Prices
| Year | Next Year | Next Five to Ten Years |
|---|---|---|
| 1978 | 6.9 | |
| 1979 | 9.7 | 6.9 |
| 1980 | 9.7 | 9.1 |
| 1981 | 7.1 | 6.1 |
| 1982 | 4.6 | 5.2 |
| 1983 | 3.2 | 4.9 |
| 1984 | 3.4 | 5 |
| 1985 | 3.1 | 4.7 |
| 1986 | 2.8 | 3.9 |
| 1987 | 3.1 | 3.9 |
| 1988 | 3.5 | |
| 1989 | 3.8 | |
| 1990 | 4.3 | 4.5 |
| 1991 | 3.2 | 4.2 |
| 1992 | 2.8 | 3.6 |
| 1993 | 3.1 | 3.5 |
| 1994 | 3 | 3.3 |
| 1995 | 2.9 | 3.2 |
| 1996 | 3 | 3.1 |
| 1997 | 2.8 | 3 |
| 1998 | 2.5 | 2.8 |
| 1999 | 2.7 | 2.9 |
| 2000 | 3 | 2.9 |
| 2001 | 2.6 | 3 |
| 2002 | 2.6 | 2.8 |
| 2003 | 2.5 | 2.7 |
| 2004 | 3 | 2.8 |
| 2005 | 3.2 | 2.9 |
| 2006 | 3.2 | 3 |
| 2007 | 3.2 | 3 |
| 2008 | 4.5 | 3.1 |
| 2009 | 2.7 | 2.9 |
| 2010 | 2.8 | 2.8 |
| 2011 | 3.5 | 2.9 |
| 2012 | 3.2 | 2.8 |
| 2013 | 3.1 | 2.9 |
| 2014 | 3.1 | 2.8 |
| 2015 | 2.7 | 2.7 |
| 2016 | 2.7 | 2.6 |
Source: University of Michigan Surveys of Consumers. Annual averages. 2016 is the average through August. Longer-run questions were not asked in 1978, 1988, and 1989.
Figure 2: Non-Response on Year-Ahead Inflation Expectations
| Year | Up/Down Question | How Much Question |
|---|---|---|
| 1978 | 2.0 | 22.0 |
| 1979 | 1.6 | 16.6 |
| 1980 | 1.9 | 13.5 |
| 1981 | 1.7 | 9.6 |
| 1982 | 2.0 | 6.5 |
| 1983 | 1.5 | 5.9 |
| 1984 | 1.7 | 5.8 |
| 1985 | 1.3 | 4.7 |
| 1986 | 1.1 | 5.8 |
| 1987 | 1.0 | 6.4 |
| 1988 | 0.8 | 6.1 |
| 1989 | 0.9 | 6.2 |
| 1990 | 0.6 | 5.8 |
| 1991 | 0.9 | 5.8 |
| 1992 | 1.0 | 6.0 |
| 1993 | 1.2 | 6.4 |
| 1994 | 1.1 | 7.3 |
| 1995 | 0.6 | 7.5 |
| 1996 | 0.7 | 7.7 |
| 1997 | 0.8 | 8.7 |
| 1998 | 1.4 | 12.7 |
| 1999 | 1.1 | 11.1 |
| 2000 | 1.2 | 11.6 |
| 2001 | 1.9 | 13.3 |
| 2002 | 2.1 | 14.8 |
| 2003 | 1.3 | 13.1 |
| 2004 | 0.7 | 12.4 |
| 2005 | 0.4 | 11.7 |
| 2006 | 0.6 | 9.9 |
| 2007 | 0.5 | 11.4 |
| 2008 | 0.8 | 12.6 |
| 2009 | 1.2 | 10.7 |
| 2010 | 0.6 | 9.2 |
| 2011 | 0.6 | 10.4 |
| 2012 | 0.9 | 11.3 |
| 2013 | 0.6 | 8.9 |
| 2014 | 0.6 | 8.7 |
| 2015 | 0.6 | 8.9 |
| 2016 | 0.6 | 7.5 |
Source: University of Michigan Surveys of Consumers. Authors' calculations. Weighted.
Figure 3: News Heard About Prices
| Year | Lower Prices (Good) | Inflation (Good) | Deflation (Bad) | Higher Prices (Bad) |
|---|---|---|---|---|
| 1978 | 0.5 | 0.1 | 0.0 | 6.6 |
| 1979 | 0.5 | 0.3 | 0.0 | 11.5 |
| 1980 | 0.6 | 0.1 | 0.0 | 7.5 |
| 1981 | 0.9 | 0.1 | 0.0 | 3.6 |
| 1982 | 1.4 | 0.0 | 0.1 | 1.6 |
| 1983 | 1.9 | 0.1 | 0.0 | 0.9 |
| 1984 | 1.0 | 0.1 | 0.0 | 1.0 |
| 1985 | 0.9 | 0.0 | 0.2 | 1.0 |
| 1986 | 2.0 | 0.2 | 1.3 | 0.9 |
| 1987 | 0.3 | 0.5 | 0.2 | 1.5 |
| 1988 | 0.5 | 0.2 | 0.1 | 1.4 |
| 1989 | 0.4 | 0.2 | 0.1 | 2.4 |
| 1990 | 0.2 | 0.2 | 0.1 | 3.7 |
| 1991 | 0.5 | 0.2 | 0.1 | 1.1 |
| 1992 | 0.1 | 0.1 | 0.1 | 0.6 |
| 1993 | 0.3 | 0.2 | 0.2 | 0.6 |
| 1994 | 0.4 | 0.0 | 0.0 | 0.5 |
| 1995 | 0.3 | 0.2 | 0.0 | 0.6 |
| 1996 | 0.4 | 0.1 | 0.1 | 1.2 |
| 1997 | 0.6 | 0.1 | 0.0 | 0.6 |
| 1998 | 0.2 | 0.0 | 0.1 | 0.4 |
| 1999 | 0.4 | 0.1 | 0.0 | 0.9 |
| 2000 | 0.3 | 0.0 | 0.0 | 4.8 |
| 2001 | 0.3 | 0.0 | 0.1 | 2.1 |
| 2002 | 0.2 | 0.0 | 0.0 | 0.9 |
| 2003 | 0.2 | 0.1 | 0.1 | 1.2 |
| 2004 | 0.3 | 0.1 | 0.0 | 3.7 |
| 2005 | 0.6 | 0.0 | 0.0 | 10.7 |
| 2006 | 2.0 | 0.0 | 0.0 | 8.4 |
| 2007 | 0.8 | 0.0 | 0.0 | 5.8 |
| 2008 | 0.7 | 0.0 | 0.0 | 11.3 |
| 2009 | 0.5 | 0.0 | 0.0 | 0.9 |
| 2010 | 0.4 | 0.0 | 0.0 | 0.7 |
| 2011 | 0.1 | 0.0 | 0.0 | 4.0 |
| 2012 | 0.7 | 0.0 | 0.0 | 2.8 |
| 2013 | 0.3 | 0.0 | 0.0 | 1.1 |
| 2014 | 1.4 | 0.0 | 0.1 | 1.4 |
| 2015 | 4.1 | 0.0 | 1.1 | 1.3 |
| 2016 | 2.6 | 0.3 | 1.9 | 0.7 |
Source: University of Michigan Surveys of Consumers. Authors' weighted calculations. Annual averages. 2016 is the average through August.