Shoppers looking for a break from their holiday meal at the grocery store were disappointed by Tuesday’s consumer price index report. CPI showed cooling inflation, but food prices — especially some holiday staples — remained stubbornly high.
Consumer Price Index Increase 0.1% in November, lower than some economists expected. Over the past 12 months, it has risen 7.1%. Foodstuffs rose 0.5 percent last month after gaining 0.6 percent in October. The food index rose by 10.6% compared with last year.
“The headline inflation data was encouraging for the overall economy, but consumers weren’t breathing a sigh of relief at the grocery store,” said David Ortega, an associate professor in Michigan State University’s Department of Agri-Food and Resource Economics. November will be the ninth straight month of double-digit inflation in grocery prices. Grocery prices are still 12% higher than a year ago.”
Food prices rose 11.4% in August from a year earlier, the most since May 1979, according to Marketwatch analyze government data.
“The good news is that food price increases and grocery price increases peaked in August,” Ortega added. There is relief in the shops that this is because inflation reflects how quickly prices rise over time, so just because inflation is starting to moderate a bit doesn’t mean things are getting cheaper. They just aren’t raising prices as fast .”
Supply chain disruptions, conflict in Ukraine, climate change, deadliest Ortega explained that the history of bird flu in the U.S., transportation costs and increased consumer spending on food are all drivers of higher food prices.
“We’ve had supply chain disruptions, and they’re starting to ease from the pandemic. But earlier this year, the conflict in Ukraine sent commodity prices skyrocketing. Those have come down significantly, but it’s going to take time for that to fully materialize in grocery stores.”
Climate change is also affecting agricultural production, which means less food on the market and higher prices, he said. Ortega said that while it’s hard to say when food prices will start to come down, he expects it could happen within the next six months or so.International Monetary Fund freed An October report said the Fed’s rate hikes would “put downward pressure on prices through the end of next year.”
Donna McAllister, an assistant professor in Texas Tech University’s Department of Agricultural and Applied Economics, said prices are always higher this time of year, and the problems for many Americans are compounded this month. according to A Nov. 23 Bankrate analysis of the cost of holiday essentials showed six of the 10 items with the most price increases were food items, including turkey, baked goods, eggs, flour and prepared mixes.
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Consumers preparing Christmas ham for parties, buying frozen pies or making sugar cookies this month will find prices are significantly higher than last year. Ham rose 7.8% year-on-year, frozen and refrigerated bakery products rose 19.4%, eggs rose 49.1%, CPI programme.
“A lot of it has to do with increased production and transport costs, but also increased demand for things like butter, people go out and buy things like eggs and butter and flour to cook with, so there’s a demand story here too, ’ said Ortega.
McCallister recommends reducing food waste by making more frequent trips to the store for specific meals, buying some items in bulk, or switching from name-brand to store-brand items to save money this holiday season.