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  1. ForecastsUnited States

    US: 7 times in a row forecasters raised their inflation forecast for 2022

    2.2%expected in February 2021
    7.1%outcome

    US inflation, 2022

    0520212023

    Over 8 surveys the typical forecast moved from 2.2% in February 2021 to 7.7% in the last, catching up with reality in steps.

    Source: Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters; actual: BEA and BLS; recessions: NBEROpen on the chart →
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    The Survey of Professional Forecasters: each quarter since 1968 the Federal Reserve Bank of Philadelphia asks several dozen economists at banks, firms and research centres for their forecasts of growth, unemployment, inflation and the probability of a downturn.

    Across: when each survey was taken. Blue: the median forecast for 2022 in each survey (first as next year, then as the current year); orange: the outcome. The shading is the error.

    Medians of the Philadelphia Fed survey: for the next year in the four surveys of 2021, for the current year in the surveys of 2022. Inflation: CPI, fourth quarter over fourth quarter. Actual: latest BEA and BLS data. A run: consecutive revisions in one direction larger than 0.05.

    Not only the IMF errs in steps: private forecasters show the same pattern, taking in new information piecemeal.

    A question for this picture

    Why do forecasters move in small steps even when they see they keep missing the same way?

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