People hoping to find a bit of relief from the supermarket for their Christmas dinners will be disappointed by the Consumer Price Index released Tuesday. The CPI shows that inflation is decreasing, but the cost of food — especially for the most essential holiday foods remain very excessive.
The CPI was up 0.1 percent in November, but it was less than what some economists were expecting. In the past 12 months, it has increased 7.1 percent. Food prices rose 0.5 percent in November, following some growth of 0.6 percent in October. The index of food prices increased 10.6 percent over the same period last year.
“The headline inflation figures are positive for the overall economy, but consumers aren’t getting relief from the shop,” said David Ortega who is an associate professor in the Department of Agriculture economics as well as resource economics of Michigan State University. “We’re considering November to be an eighth consecutive month with two-digit price increases for groceries. Prices for grocery items are still 12percent higher than they were one last year.”
As of August the price of food jumped 11.4 percent over the same period last year’s cost, an increase that has not been seen in the past since 1979. as per Marketwatch‘s study of data from the government.
“The positive is that the price of food and price hikes for groceries peaked in August.” Ortega added, “They’re slowing but surely coming down. We’re heading in the right direction however consumers aren’t experiencing satisfaction at the grocery store, and that’s because inflation is the rate of price rises in time. Therefore, even if the rate of inflation begins to slow down does not mean that the items are becoming cheaper. It’s just that they’re not increasing in price as rapidly.”
Disruptions to supply chains, conflict in Ukraine and climate change the most deadly bird flu outbreak in U.S. history, transportation costs, and a rise in consumer expenditure on food are all the reasons for rising food costs, Ortega explained.
“We are experiencing disruptions to supply chains and they’re beginning to recover from the spread of the pandemic. However, we also are facing the war in Ukraine that caused an increase in prices for commodities in the beginning of this year. These have decreased substantially, but it will take some time before they are fully appreciated at the supermarket.”
The climate change has also impacted the production of agricultural products, he added that has resulted in less food available on the market, and higher costs. Ortega stated that while it’s difficult to predict when food prices will start to fall however he believes it will happen within the in the next six months or at least. It was reported that the International Monetary Fund released its report in October in which it said Federal Reserve interest rate increases will cause “downward tension on food prices until the final quarter of the year.”
Donna McCallister, assistant professor at the department of agriculture and applied economics , at Texas Tech University, said prices are always higher at this time of the year which is a problem that has been affecting the majority of Americans during November. Based on Bankrate’s November. 23 study of the costs of essentials for the holidays Six of the 10 items with the highest-priced items included food items such as turkey, bakery goods eggs, flour, and mixes that are prepared.
People who prepare a Christmas ham, purchasing frozen pie or baking sugar cookies to serve at a party this month will pay more expensive prices than they did the previous year. Ham prices are growing by 7.8 percent over the past year refrigerated and frozen bakery products are up 19.4 percent, while eggs are increasing by 49.1 percent, according to the CPI. shows.
“A majority of that is to do with the increased costs of production and transportation but there’s also an increase in demand for these items such as butter, which is why people will go out and purchase items such as eggs, butter and flour to cook with and baking, which is an issue of demand also,” Ortega said.
In Maine this week the Governor Janet Mills proposed an emergency spending package that would offer cash checks as well as other funds to reduce the high cost borne by Maine residents. The problem is that Senate Republicans opposed that initiative.
