Searching for “inflation canaries” in household surveys

This is the authors' abstract. We don't add key points for this paper.

Current surveys of household inflation expectations make it challenging to identify "inflation canaries"-individuals who consistently send out early and accurate warning signals for inflation.We propose some simple changes in survey design (longer, staggered survey panels) and emphasis (focusing on changes in expectations rather than levels and highlighting particularly accurate subpopulations) that have the potential to alleviate these concerns.To demonstrate, we provide several examples using the Federal Reserve Bank of New York's Survey of Consumer Expectations.Historically, miners relied on canaries to provide an early warning of toxic gases.Canaries would feel the effects of these gases first, and their demise would warn the miners that they needed to get out to avoid being poisoned.In this Chicago Fed Letter, we explore the survey design challenges that affect the potential to identify inflation canaries-individuals who send out early and accurate warning signals that inflation is going up or down-in current household surveys of inflation expectations.