Finance expert and podcast host Rachel Cruze shares her top grocery budgeting tips for consumers as inflation continues to weigh on shoppers nationwide in Cavuto: Coast to Coast.
Persistent inflationary pressures in the US economy have kept food prices high, although inflation in other sectors of the economy has eased somewhat.
The Bureau of Labor Statistics monthly consumer price index (CPI) for January, released last week, showed that home food prices – the classification for food that is store-bought and prepared at home – fell 11.3% year-on-year. have risen. That figure is well above the headline inflation figure, which came in at 6.4% yoy in January, down from a 40-year high of 9.1% in June 2022.
High food prices hit families with fixed and low incomes particularly hard. For those receiving Social Security, the 8.7 percent cost-of-living adjustment (COLA) that took effect in January 2023 — the largest since 1981 and raising the average monthly benefit by about $140 — still leaves beneficiaries a relative lower income groceries compared to a year ago even with the COLA.
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Shoppers shop at a grocery store in Glenview, Illinois, Monday, July 4, 2022. U.S. demand for grocery deliveries is cooling as food prices rise. Some shoppers are switching to cheaper grocery pickups, while others are returning to the store. (AP Photo/Nam Y Huh/AP Images)
Inflation could persist in the economy despite the Federal Reserve’s rate hikes, which are expected to gradually bring inflation back to the Fed’s target rate of 2%. Last week’s inflation report showed CPI rising 0.5% in January after surprisingly falling 0.1% in December.
Grocery retailers are trying to contain food costs, according to FMI – The Food Industry Association VP of Tax, Trade, Sustainability and Policy Development Andy Harig.
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Carmelia Bello is a bodega owner in Brooklyn, New York, who said inflation and crime hurt her business. (iStock / iStock)
“The January CPI shows that inflationary price increases are not falling as quickly or evenly as consumers would like,” Harig wrote in a press release following the latest CPI report. “Unfortunately, food prices are likely to remain elevated in the short-term and we expect there could be further volatility in terms of rising and falling inflation over the coming months. That said, we remain cautiously optimistic that the worst of it for groceries is price inflation is behind us.”
Harig added that his own survey found that shoppers are spending an average of $151 a week on groceries, which is below the pandemic peak of $161 a week, noting, “To help consumers make their Stretching grocery dollars, grocers have dramatically increased investment in their private label offerings, among other strategies.”
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The US Department of Agriculture’s (USDA) Economic Research Service (ERS) forecast in January that food prices will rise more slowly in 2023 than in 2022, although prices will remain above historical averages. The ERS report released last month forecast that all food prices will increase by 7.1% with a forecast range of 4.2% to 10.1% in 2023. Home food prices are expected to increase in 2023 8% increase, with an interval of 4.5% to 11.7%, according to ERS.