It’s often said that Americans agree on almost nothing these days, a sign of the times. But that’s not entirely true. There’s one topic on which there’s near-unanimous agreement: Inflation. Americans of all political persuasions expect prices to shoot up over the next year.
The data are unequivocal: In our November I&I/TIPP Poll, 84% said “over the next year prices for gasoline, food, and other household products” would be “much higher” or “somewhat higher” than today. Only 8% thought they’d be lower, while 5% weren’t sure.
The big surprise comes from those who expect “much higher” prices (48%), compared to those expecting only “somewhat higher” prices (36%). Clearly, many people are preparing themselves for a slog against ’70s-style inflation at least for the next year.
These numbers come from November’s I&I/TIPP Poll of 1,306 adults, which was conducted online from Oct. 27-29 by TechnoMetrica Market Intelligence, I&I’s polling partner. The margin of error is +/-2.8 percentage points.
The I&I/TIPP data come during a raging policy debate among economists and pundits over whether current extreme gains in inflation mark the start of a long-term price rises, or just a “transitory” increase in response to recent government and Federal Reserve stimulus.
Inflation, as measured by the year-over-year monthly increase in consumer prices, has been surging since April of this year, when it jumped to 4.2% from the first quarter’s average rate of just 1.8%. At the time, many experts surmised it was “transient” or “temporary.”
However, since then, it’s move up sharply. Indeed, for the five months following April, all the monthly gains from the year before were 5% or higher. In October, prices surged 6.2%, a 30-year high, exceeding even already-gloomy forecasters’ predictions. That compares with the average 1.9% annual CPI rate that prevailed during President Donald Trump’s four years in office.