Inflation is starting to come down, but shoppers continue to feel the pinch of higher prices at the grocery store.
Food prices in December 2022 increased 10.4% from the same time in 2021, according to the Jan. 12 consumer price index report, composed by the U.S. Bureau of Labor Statistics. From November to December 2022, the increase was 0.3% — smaller than the 0.5% increase from October to November, according to the report.
The consumer price index, or CPI, uses indexes to measure the change in the average cost of items that consumers purchase in a given period. And there are specific indexes for these items, including food costs.
The index for food at home (groceries) increased 11.8% year-over-year. But that increase is smaller when measured from month to month. Grocery costs increased 0.2% in December, compared with 0.5% in November.
Meanwhile, the food away from home index — restaurant and takeout — is up 8.3% year-over-year. These prices increased 0.4% in December, compared with 0.5% in November. Specifically, full-service (sit-down restaurant) meals rose 8.2% year-over-year, while limited service meals (takeout only) rose 6.6% year-over-year.
Recent changes to food costs
The latest CPI data show the biggest price change in the egg index, which increased 11.1% from November to December. This reflects the impact of the continuing avian flu among chickens in the U.S.
Other indexes fell in the same period, including meat, poultry and fish (down 0.6%) and fruits and vegetables (down 0.1%).
Annual increases (December 2021 to December 2022) have been most dramatic among the following indexes:
Cereals and bakery products: +16.1%.
Processed fruits and vegetables: +15.5%.
How are food prices tracked?
There are multiple indexes that track consumer prices for food:
The Bureau of Labor Statistics tracks the CPI, which measures the change in average price that consumers pay for goods and services, including food. So the CPI is also a measure of inflation.
In the CPI, the cost of food is of high relative importance to the overall index, compared to the other tracked goods and services. Food costs make up 13.78% of the index, to be exact. Its importance is second only to shelter (32.93%). But food prices, like energy, also tend to be more volatile, and for that reason it is usually left out of the “core inflation” version of the index.
The Bureau of Economic Analysis measures the personal consumption expenditures price index. The PCE tracks how much consumers spend on goods and services, as well as how consumers change spending habits in response to price shifts. Food is considered a non-durable good in its analysis. Core PCE — the Federal Reserve’s preferred measure of inflation — also excludes food and energy.
The U.S. Department of Agriculture measures the cost of different food plans. These plans are adjusted each month, based on CPI data and average family income levels: thrifty or low, moderate and liberal. The Thrifty Food Plan is the basis for the Supplemental Nutrition Assistance Program, or SNAP.
Are food prices going up?
The following are month-over-month percentage changes, seasonally adjusted, for food types tracked in the CPI.