Federal Reserve Economic Data

Expectations about inflation are an important indicator of actual future inflation: If market participants expect inflation to be higher, they may elevate prices, increasing the actual inflation rate and creating a self-fulfilling prophecy. In this FRED Blog post, we compare “breakeven” inflation expectations with actual inflation to see how they’ve both evolved over time.

The FRED graph above shows 5-year (medium-term) and 30-year (long-term) breakeven inflation rates, along with the consumer price index (CPI), which measures actual inflation in the economy.

The breakeven inflation rate is the difference in yields between a standard Treasury security, which specifies payments in nominal terms, and an inflation-protected Treasury security (or TIPS), which adjusts its principal with inflation. This difference is a common representation of what markets expect inflation to be in the future—here, after 5 years and 30 years.

Before the COVID recession, the 5-year breakeven inflation rate was generally lower than its 30-year equivalent: Households expected that inflation would be higher in the longer term than the medium term or that current inflation was below the long-term trend. During this period, inflation was frequently below the Fed’s 2% inflation target.

During the period of high inflation in 2021-2022, medium-term inflation expectations were higher than long-term expectations, which may mean that markets believed inflation was higher than the long-term trend and would fall in the coming years.

This belief seems to have been validated, as inflation has since dropped. And, since 2023, medium-term and long-term inflation expectations have started to converge: Markets believe average inflation over the next 5 years will be similar to the average inflation over the next 30 years.

How this graph was created: Search FRED for and select “5-Year Breakeven Inflation Rate (T5YIE).” From the “Edit Graph” panel, under “Modify Frequency,” select “Monthly” and make sure “Aggregation Method” is “Average.” Use the “Add Line” tab to search for and select “30-year Breakeven Inflation Rate (T30YIEM)” and again to search for and select “Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL).” Under “Units,” select “Percent Change from Year Ago.” Select the time period 2015-02-01 to 2025-02-01. Use the “Format” tab to scroll down to Line 1 and Line 2, click the plus symbol next to the “Customize” bar, and under “Line style” select “Solid.” For Line 3, under “Line Style” select “Dot” and under “Color” type #666360.

Suggested by Yu-Ting Chiang and Mick Dueholm.

The FRED graph above tracks retail sales since 1992, split into two major categories: general retail and food and drink services specifically. To protect our analysis from inflationary illusions, we’ve deflated the series by the consumer price index (CPI).

Both retail categories have increased steadily over time, with declines during the financial crisis and the COVID pandemic. With the pandemic, the data are more interesting: After both series initially dipped, food and drink services struggled to return to previous levels, while general retail shot back up to an even higher level. Both series have stagnated for a couple of years now.

The second graph (below) provides some details on the retail side and shows some stark differences.

It should be no surprise that department stores continue to struggle while mail-order retail (including online shopping) has been booming for many years, including an explosion during the pandemic. What may be less familiar is that liquor stores were one of the very few types of retail stores that did well during the pandemic. This extra business lasted for a few years but has now settled back to previous levels.

So, if sales at restaurants and bars and liquor stores are stagnating, does this mean the US population is sobering up after a drowsy pandemic? To understand this better, we use one more graph (below) to reveal the wholesale of alcoholic beverages, again adjusted for inflation. And, indeed, sales are way down after a peak during the pandemic.

How these graphs were created: From FRED, navigate to the Census Bureau’s Monthly Sales for Retail and Food Services by Kind of Business release table. Select the series to display and click “Add to Graph.” From the “Edit Graph” panel, use the “Edit Line” tab to search for “CPI” and apply the formula a/b*100. For the second graph, also change the units for each line to 100 in 2020-02-01. For the third graph, search FRED for and select “alcohol sales.” From the “Edit Graph” panel, again add CPI to the line and apply formula a/b*100.

Suggested by Christian Zimmermann.

The FRED Blog has discussed population changes, including movement in and out of the United States and across US counties. Today, we consider the related question of what influences a worker who works from home to relocate to another state?

The FRED map above shows data from the US Bureau of Labor Statistics on the percent change in the size of each state’s labor force in 2024. A careful review of the map shows that all states recorded at least some growth in their labor force. However, there were large differences: from 0.02% growth in Delaware to 2.59% growth in Washington, DC.

FRED doesn’t currently have data on what fraction of the labor force works remotely, but recent research from the St. Louis Fed sheds some light on those patterns.

Alexander Bick, Adam Blandin, Cassandra Marks, Karel Mertens, and Hannah Rubinton studied the reasons that commuters and remote workers relocated. They found that remote workers most frequently moved for reasons related to housing. Thus, the affordability of regional housing markets likely weighed heavily in their decisions and could partly be reflected in faster growth in some states’ labor forces.

Of course, other demographic factors (e.g., fertility, immigration) are at play here. But if you’re a remote worker considering relocating to reduce your housing costs, we recommend reading this FRED Blog post on regional price differences.

How this map was created: Search FRED for “Civilian Labor Force in Ohio” and click the “View Map” option. Click on the “Edit Map” option, and under “Units” select “Percent Change from Year Ago.”

Suggested by Diego Mendez-Carbajo.