Americans expect inflation to be far higher than it really is, polling shows
- Written by Paul Whiteley, Professor, Department of Government, University of Essex
American voters often rank inflation as the most important issue facing the US[1]. But something odd has happened to inflationary expectations since Donald Trump became president in January. Americans believe inflation is much higher than it is, and are bracing themselves for further increases.
The difference between real inflation and what the public think it is has diverged by a significant amount – much more so than under former president Joe Biden.
In December 2024, while Biden was still in office, respondents in surveys conducted by the University of Michigan[2] predicted a rate of inflation of 2.8%, when it was actually 2.7%. However, by May 2025, five months into Trump’s second term, the public was estimating inflation at 6.6% when inflation had fallen to 2.4%[3].
The inflation expectations surveys included the following question: “By about what percent do you expect prices to go up/down on the average, during the next 12 months?”
The chart below shows the average response to this question over four years. This tells us what the average American feels about price increases, rather than what is actually happening in the economy. These views directly affect spending by consumers and therefore growth and employment in the US economy.
Expectations and actual inflation 2021 to 2025:
Graph by Paul Whiteley based on data from YouGov for the Economist, CC BY-SA[18]
The chart compares Trump’s overall job approval with his approval ratings for handling inflation. They track very closely – and both are rapidly falling, indicating that the failure to combat inflation is tarnishing the president’s approval ratings.
Presidential job approval is closely related to voting behaviour, so if inflation continues to rise and the public believe it will be even higher in the future, then this is likely to damage both Trump and the Republican party in the midterm elections next year.
References^ facing the US (today.yougov.com)^ University of Michigan (data.sca.isr.umich.edu)^ fallen to 2.4% (fred.stlouisfed.org)^ CC BY-SA (creativecommons.org)^ Joe Biden’s inauguration (fred.stlouisfed.org)^ home ownership (fred.stlouisfed.org)^ many Americans (www.nytimes.com)^ CC BY-SA (creativecommons.org)^ governor of the Federal Reserve (www.wsj.com)^ introduction of high tariffs on goods from other countries (www.bbc.co.uk)^ tariffs (www.bbc.co.uk)^ would buy only (share.google)^ “big beautiful bill” (press.princeton.edu)^ in green energy projects (www.ft.com)^ over the period 2025-2034 (www.ft.com)^ borrow large amounts (press.princeton.edu)^ YouGov for the Economist newspaper (d3nkl3psvxxpe9.cloudfront.net)^ CC BY-SA (creativecommons.org)
