A majority of Americans in a new Gallup poll say they think inflation will continue to go up, with half of respondents predicting that it will rise by “a lot.”
In the January poll, 79 percent of respondents said they expected inflation to rise by some degree, and 50 percent said they were expecting it to rise “a lot.” Gallup noted in its report that this was the highest percentage of Americans to say they thought inflation will rise since it first began asking this question in 2001.
“In the past, Americans have always been more likely to say inflation will increase rather than decrease, but the current expectation is higher than usual — in fact, it is the highest Gallup has measured in its trend,” the pollster said in a statement. “The prior high was 76% in September 2005. In recent years, from 2007 through 2020, roughly six in 10 Americans have expected inflation to increase.”
While the same survey found that Americans were more likely to predict that the stock market was also going to rise, Gallup noted that it was conducted shortly before stock prices saw a sharp decline. A majority of respondents — 78 percent — also predicted that interest rates will rise as well.
The Federal Reserve is expected to announce plans Wednesday for the economy, possibly hinting at an interest rate hike in March. Federal Reserve Chair Jerome Powell will also hold a press conference on Wednesday, where he is expected to face tough questions over inflation.
Inflation hawks and Republican lawmakers have mounted pressure on the Fed, which they believe has fallen behind the curve on the issue.
At the start of the pandemic, the Fed slashed interest rates and deployed trillions of dollors in stimulus to protect the economy from the effects of the coronavirus pandemic.
The labor market has recovered all but 600,000 jobs lost in the pandemic, but a shortage of workers remains.
Americans were evenly split on how they felt the economy was going to change going forward, with 40 percent saying they thought it was going to go up and 39 percent saying they thought it would go down. While the results of the survey appeared to show a somewhat pessimistic view of the economy, more respondents believe that unemployment will also go down.
The Gallup poll was conducted Jan. 3-16 with a sample of 811 U.S. adults. The results of the survey have a margin of error of plus or minus 4 percentage points.
Inflation has consistently been cited as a top priority issue for Americans. In a Monmouth University poll released in December, the rising cost of goods and inflation were pointed to as the top concern for survey participants.