The meteoric rise in food prices slowed slightly in December, per a new Axios analysis — but prices were still up more than 10% year-over-year, as groceries and restaurants gobbled up a larger-than-usual amount of Americans' spending.
Why it matters: Grocery bills are one of the most powerful ways in which many Americans experience inflation.
- As the cost of eggs, milk, and other staples rise, families living on the financial edge are left making difficult choices about what to buy — and what to skip.
- For restaurants and other businesses, higher food prices can leave owners with the difficult choice of swallowing the costs or passing them on to customers.
By the numbers: Nationwide, the cost of all foods was up 10.4% year-over-year in December, per the U.S. Bureau of Labor Statistics.
- The cost of food prepared at home was up 11.8%, while food consumed at restaurants was up 8.3%.
- Those are all down just slightly from recent highs set towards the end of 2022.
Zoom in: Dallas, the Twin Cities, and Baltimore are suffering some of the country's highest food price inflation rates, at 14.1%, 13.7%, and 13.5%, respectively.
- By comparison, food prices are up 7% in Washington, D.C., 7.7% in Chicago, and 8.8% in Miami.
Driving the news: COVID-related supply chain disruptions, climate change, and higher energy costs are just some of the factors contributing to higher food prices.
- Russia's war in Ukraine, a major wheat producer, continues to affect the global supply — and thus price — of that key foodstuff.
- The Federal Trade Commission, meanwhile, is under increasing pressure from lawmakers and advocacy groups to investigate whether egg producers are manipulating prices.
The intrigue: Some businesses have noticed that while consumers may gripe about higher costs, they're willing to pony up, as the New York Times recently reported — disincentivizing them from bringing prices back down to Earth.
The big picture: Rising prices aren't just changing the kinds of food Americans are buying, as Axios' Emily Peck recently reported — they're forcing some families to buy less food entirely.
- "People are starting to think about what they truly need — and what can wait," Emily wrote.
What we're watching: There are some glimmers of hope on the horizon.
- Wholesale egg prices, for instance, are beginning to drop, Axios' Kelly Tyko reports. Retail prices usually follow.
The bottom line: Many of the underlying economic and political factors affecting food prices persist, making it all but impossible to predict what your grocery spending might look like this year.
