By many measures the price of food is on the rise. Let’s discuss some charts.
The price of food away from home closely track the PPI. And the PPI shows rising pressure on prices.
CPI Food Index Levels at Home vs Away
From January 2021 through December 2022, the trend line slope of the increase in food at home vs away was similar, on average.
Starting 2023, the price of food at home nearly flatlined through August of 2024 in contrast to the price of food away from home.
I attribute the difference to strongly rising minimum wages and staff shortages that impacted restaurants more than grocery stores. But the past few months show rising pressure on groceries as well.
CPI Five Food Categories Year-Over-Year
Year-over-year, the price of food at home generally bottomed in late 2023 or early 2024.
In particular, the year-over-year price of Meat, Fish, Poultry and Eggs category jumped from -0.9 percent to 4.2 percent.
Cattle Futures
CPI Spotlight on Food
CPI Month-Over-Month Food
Food at Home vs Away from Home Month-Over-Month
- Between February of 2023 and August of 2024, the price of food at home rose no more than 0.20 percent. The average monthly increase in that period was 0.06 percent.
- Between February of 2023 and August of 2024, the price of food away from home rose at least 0.4 percent on 11 occasions. The average monthly increase in that period was 0.40 percent.
In the last four months starting September, the price of food at home has gone up 0.4, 0.1, 0.5, and 0.3 percent. This also corresponds to the lead PPI chart.
Food at Home vs Away From Home Since January 2023
Food Inflation Appears Poised to Rise
The year-over-year price of food is 1.8 percent. It may decline in January of 2025 due to a very easy comparison (green highlight 0.4 percent).
But starting February, the month-over-month comparisons will be very difficult to beat regardless of producer prices.
If the PPI is strong, food away from home will see upward pressure month-over-month even if year over-year numbers moderate.
Regardless, what matters most are the indexes and month-over-month numbers and those bottoms seem to be set.
CPI Jumps 0.4 Percent in December, Markets Giddy Anyway
For analysis of the overall CPI, please see CPI Jumps 0.4 Percent in December, Markets Giddy Anyway
The Markets are pleased with a CPI report that isn’t that great. Here are the details.
January 14, 2025: A Mostly Good PPI Report With Easy Year-Over-Year Comparisons Coming UP
The Producer Price Index (PPI) for services was unchanged in December but the price of goods jumped 0.6 percent.
Final demand services is about 67 percent of the index. This is why services at 0.0 percent and goods at 0.6 percent resulted in a change of 0.2 percent.
If services remain benign, the Fed would be happy with the tradeoff of goods vs services.