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What do consumers think is the main driver of recent inflation?

Author

Listed:
  • Georgarakos, Dimitris
  • Kouvavas, Omiros
  • Meyler, Aidan
  • Neves, Pedro

Abstract

Consumer perceptions of the factors driving inflation can be an important determinant of their economic behaviour and inflation expectations. In this context, in June 2023 the ECB’s Consumer Expectations Survey asked consumers what they believed was the main factor driving changes in the general level of prices for goods and services in their country over the past 12 months. Most consumers believe that price changes over the past 12 months were mainly driven by input cost factors, with corporate profits ranked second and wages third. Consumers responding that other input costs are the main driver expect inflation to be less persistent. Consumer perceptions of the factors driving inflation should continue to be monitored. As the various drivers can influence inflation persistence differently, profits or wages being perceived as more prominent drivers in the future could have implications for consumers’ medium-term inflation expectations. JEL Classification: D11, D84, E31

Suggested Citation

  • Georgarakos, Dimitris & Kouvavas, Omiros & Meyler, Aidan & Neves, Pedro, 2023. "What do consumers think is the main driver of recent inflation?," Economic Bulletin Boxes, European Central Bank, vol. 6.
    • Handle: RePEc:ecb:ecbbox:2023:0006:4
    Note: 483508
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    More about this item

    Keywords

    Consumer survey; inflation expectations; input costs; profits; wages;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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