over 2 years ago • 1 min
Older Americans are much more worried about imminent inflation than their Millennial children, according to sentiment surveys from the Federal Reserve (the Fed).
The chart shows how Americans over 60 expect inflation to hit 5.9% in the coming year, while those under 40 foresee a much more reasonable 4% increase in prices. While Baby Boomers – born before 1964 – have for years been more concerned about inflation than those born after 1981, the gap between the two cohorts’ forecasts has now risen to the highest level since 2013.
There may be a few things happening here. Perhaps the kinds of items Millennials buy more of – like Uber taxi rides or DoorDash takeout – are suffering from less pricing pressure than items favored by their parents’ generation. Or perhaps younger Americans who’ve never experienced serious inflation for themselves find it harder to imagine than those who lived through the 1970s.
Either way, Millennials’ predictions have proved much more accurate over the years. Since 2013, when the Fed data starts, over 60s have on average expected inflation over the next 12 months to come in at 3.2% while the equivalent forecast from under 40s has been 2.4%. The actual US inflation rate over that eight-year stretch has been just 1.7%.
With data on Wednesday showing that US inflation moderated in July, perhaps Boomers will eventually calm down and adopt Millennials’ more optimistic approach to the economy.
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