<p>This study examines the impact of social comparison and relative factors on the inflation expectations, consumption outlook and ability of households to maintain their lifestyle. Using data from the Survey of Consumers for United States households from 1978 onwards, we find that as peers’ incomes rise, households report higher inflation expectations. Furthermore, as peers’ incomes rise, households are more likely to have a positive consumption outlook and are less confident in their ability to maintain their current lifestyle through savings and social security. This is consistent with interpretations in the literature that link peer income growth to increased consumption and concerns about relative position, channels that may help explain the rise in reported inflation expectations. We also find that the pattern of social comparison changes over the household life cycle, where younger households tend to compare themselves to those who earn more than they do, whereas older households compare themselves to those who earn less than they do.</p>