Although inflation is beginning to fall, shoppers still feel the pinch from higher grocery prices.
According to the U.S. Bureau of Labor Statistics’ Jan. 12 consumer price index report (comprised by the U.S. Bureau of Labor Statistics), food prices increased 10.4% in December 2022 compared to 2021. According to the report, the increase in November-2022 was 0.3%, which is less than the 0.5% increase in November-2021.
CPI (consumer price index) uses indexes in order to measure changes in the average cost for items consumers buy over a period. These items include food costs, and there are specific indexes.
Year-over-year, the index for food at-home (groceries), increased 11.8%. However, the increase is less if you compare it to each month. Groceries costs rose 0.2% in December compared to 0.5% in November.
The food away from home index, which includes takeout and restaurant orders, is up 8.3% over the past year. These prices rose 0.4% in December compared to 0.5% in November. Particularly, the prices for full-service (sit down restaurant) meals increased 8.2% year over year, while takeout meals only rose 6.6%.
Recent food cost changes
CPI data from December 2013 show that the egg index saw the largest price increase, rising 11.1% between November and December. This is due to the ongoing avian influenza among chickens in America.
Other indexes also fell during the same period: meat, poultry, fish (down by 0.6%), fruits and vegetables (down by 0.1%).
The most dramatic annual increases (December 2021-2022) were recorded in the following indexes:
Fats & oils: +23.2%.
Cereals, bakery products and other food: +16.1%
Processing fruits and vegetables: +15.5%.
Dairy products: +15.3%.
How can food prices be tracked?
Multiple indexes track food consumer prices:
The Bureau of Labor Statistics tracks CPI. This is the average change in the price consumers pay for goods and food. The CPI also measures inflation.
The CPI shows that food costs are of greater relative importance than other goods and services. To be precise, 13.78% of the index is made up by food costs. It is second in importance to shelter (32.93%). Food prices, like energy and food, are more volatile than other commodities, so it is often left out of the index’s “core inflation” version.
The Bureau of Economic Analysis calculates the price index for personal consumption expenditures. The PCE measures how much consumers spend on goods or services and how they change their spending habits to adjust for price shifts. It excludes food from its analysis. Core PCE, the Federal Reserve’s preferred measure for inflation, excludes food and energy.
The U.S. Department of Agriculture calculates the cost of various food plans. These plans are adjusted monthly based on CPI data. The basis of the Supplemental Nutrition Assistance Program (SNAP) is the Thrifty Food plan.
Are food prices rising?
These are the month-over-month percentage fluctuations, seasonally adjusted for food types that were included in the CPI.