In August 2023, the Consumer Price Index (CPI), increased by 0.4% compared to the previous month, marking a 3.7% rise since August 2022. Food prices played a significant role in this inflation trend. The CPI for all food increased by 0.2% from July 2023 to August 2023, with food prices being 4.3% higher than the same period last year.
The level of food price inflation varied depending on where the food was purchased. Food-away-from-home (restaurant purchases) increased by 0.3% in August 2023, representing a substantial 6.5% increase compared to August 2022. Food-at-home (grocery store or supermarket food purchases) increased by 0.1% in August 2023 and was 3.0% higher than in August 2022.
However, many consumers will agree that the curve actually feels much steeper than 4.3%, particularly for food-at-home. Wall Street Silver recently shared this video of a man walking around Costco comparing prices from just months before and noting that they are up upwards not just 4.3% for the basics, but over 50%.
Alternate inflation data from ShadowStats.com, where figures are calculated the same way they were in 1990, show that inflation is about two percentage points higher than the official CPI figures computed and reported today.
What’s worse, of course, is that these rising food prices place the heaviest strain on low-income households. About 27% of households earning under $35,000 reporting insufficient access to food during the week of August 23 – September 4, according to the Census Bureau.
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Furthermore, as Bloomberg points out, food expenses account for a significant 11% of spending among households in the lowest income quintile, nearly double the proportion in the highest quintile.
Looking ahead, official figures from the US Department of Agriculture say that food prices are expected to continue their upward trajectory in 2023, albeit at a slower pace than in 2022. Projections indicate that all food prices are anticipated to increase by 5.8%, with food-at-home prices expected to rise by 5.1% and food-away-from-home prices predicted to increase by 7.1%.
If 4.3% already translates to 50-75% at Costco, based on the video above, then good luck to everyone.
Information for this story was found via Bloomberg, USDA, BLS, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
One Response
Grocery ordering makes it hard to lie about the price explosion. Comparing what I spent on items at Walmart in 2021 to what they cost today is showing me about 30% on most items, with some items with a much larger increases–like 80% to 90%–except somehow great value raisins? Those were $2, now they’re $2.08.