The latest inflation report from the Bureau of Labor Statistics shows that food prices once again rose by 11.4 percent year-over-year, and food inflation is now at its highest point since 1979.
The Consumer Price Index report for August showed that prices on all items in the United States rose by 8.3 percent from Aug. 2021 to Aug. 2022. The food-at-home index, a measure of price changes at the grocery store, increased by 13.5 percent, which is also a 43-year high. Compared to July, the food index rose by 0.8 percent, and the food-at-home index rose by 0.7 percent.
Among food items, eggs posted the highest annual price increase at 39.8 percent. Margarine came next at a 38.4 percent rise, followed by butter with a 24.6 percent higher price. Flour and prepared mixes rose by 23.3 percent, and roasted coffee rose by 18.7 percent. (Related: Food shortage simulation predicts 400% SURGE in food prices by 2030.)
Other food products that also posted very high price increases include frozen bakery products like pies and tarts (18.1 percent), fresh and frozen chicken parts (17.8 percent), crackers, (17.7 percent), cereals and cereal products (17.4 percent), canned fruits and vegetables (16.6 percent), white bread (16.4 percent) and rice, pasta and cornmeal (15.7 percent).
Mark Hamrick, a senior economic analyst at Bankrate.com, noted that consumers have been cutting back on spending in the face of higher prices – but this kind of thriftiness isn’t always doable for food.
“Food, at its basic level, is not discretionary,” said Hamrick. “That’s the challenging aspect of the circumstances we are in.”
“Consumers are prepared for high prices to persist in the foreseeable future, but there’s also a tendency for people to think that things might return to normal,” he added. “It’s belt-tightening time and has been for a while.”
Food inflation is yet to reach its peak
Scott Brave, lead consumer spending economist at market research company Morning Consult, told Market Watch that food inflation has yet to reach its peak.
“The longer that goes on, the higher it gets, the more difficult it becomes for lower-income individuals in particular to afford those price increases,” said Brave.
Financial experts like Brave noted that lower-income families are feeling the worst impact of uncontrolled inflation as a higher proportion of their disposable income goes to things that have also seen record-high increases such as food, but also gas and utilities.
Brave acknowledged that gas prices per gallon have fallen from a peak of over $5 in June to around $3.69 in September, but whatever benefit lower-income households may have felt from this decline was soaked up by the rise in food prices.
A survey by LendingTree, an online lending marketplace, noted that around two-thirds of Americans recently reported being worried about not being able to afford groceries at least once in the past month. People from the millennial and zoomer generations were among those most concerned about the increase in food prices.
Households with young children and lower-income families also reported a high level of stress putting food on the table. Households that make less than $35,000 a year were the most anxious about inflation, with around 74 percent of them expressing concern about the affordability of groceries.
David Portalatin, food analyst at market research firm NPD Group, noted that inflation is likely going to make people think twice before going to a restaurant, where an average meal is around 3.5 times higher than eating the same meal sourced from a grocery store.
“The inflationary pressures are actually going to drive more consumers to the grocery store than restaurants,” even though grocery prices also rose at a higher rate than those in restaurants, noted Portalatin. “The grocery store is still way less expensive than a restaurant meal.”
Learn more about food inflation in the United States at FoodInflation.news.
Watch this episode of the “Health Ranger Report” as Mike Adams, the Health Ranger, discusses the exploding inflation and cratering markets caused by Biden’s economic agenda.
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