- Food prices have risen in the last three years at highest rate since the Great Inflation of 1979-1983.
Family gatherings this month have consumed a lot of our time, energy, and money. Graduations, end-of-year celebrations, Mother’s Day — these are all blessings for certain, but the grocery bill for all these events makes equally clear that food, for many, has quickly become a luxury item.
On Wednesday, the new Consumer Price Index data shows that for April 2024 the CPI is up 0.3% after rising 0.4% in March. Over the last 12 months, the Labor Department’s Bureau of Labor Statistics says their “all items” index increase 3.4% over the last 12 months. Earlier in the week, the wholesale inflation rate hit its highest point in a year, according to Bureau of Labor Statistics.
Families at the lower end of the economic spectrum spend a higher percentage of their income on food. The reasons for this vary, from where they live to the shopping options available to them. The US Department of Agriculture says that since 2022 Americans are spending roughly 11% of their income on eating, the highest rate in 30 years.
We are all feeling that increase. Each visit to my local supermarket is startling. The prices of milk, meat, and other basics seem to be skyrocketing. It doesn’t take much digging to find out that food prices have risen in the last three years at highest rate since the Great Inflation of 1979-1983.
In fact, the Consumer Price Index (CPI) subindex for food rose almost 25% between March 2020 and March 2024. Breaking it out further, the price for eating at home rose 24.7% over the last four years, while eating out of the house rose 25.6%.
After meeting with economists and food producers this week, it is clear that accusations of price gouging are mostly crafted political narratives ahead of November. The costs of producing food from farming, to packaging, to transportation are rising every week. According to industry experts the cost of energy is the problem, plain and simple; not residual COVID supply chain problems.
The graphic below, produced by the Federal Reserve of St. Louis, shows just how steep the price climb has been.
While inflation itself is lower that the eye-popping 9.1% we saw in the 2022 midterm elections, the current 3.4% inflation is well north of the Federal Reserve’s 2% target, and interest rates are bound to go up.
Regardless of talking points coming from the White House and our governor’s mansion about the resiliency of the economy, grocery prices are where North Carolinians truly gauge the health of the economy and the stability of their own households. Food is an essential. During the last few years, many families have trimmed non-essentials, but grocery basics are non-negotiable.
Manufacturing researchers recently released data showing that a North Carolina family of four spends an average of $1,236 per month on groceries, and in our state grocery spending is 8.7% of total consumer spending, the 16th highest of all US states.
Why are grocery prices so high?
There are several factors at play in the cost of our carts. Among them, of course, are the government-imposed COVID shutdowns. Workers and factories could not operate at a regular capacity, the government picked “essential” that could stay open and “non-essential” that could not, meddling with the consumer market and the availability of goods. Supply chains were disrupted, and when people finally could shop, they wanted to buy, driving up demand.
Four years later, many people are having trouble continuing to blame the shutdowns; what else is doing this to us? The spike in energy prices is driving up the cost of everything from farming, manufacturing, transporting, and selling food. Underinvestment in our grid, when combined with the policy efforts to move too quickly to a “green economy,” has driven up price of energy, and therefore, prices of food.
It is clear that the White House is trying to rewrite economic history as the November elections approach. President Biden has repeated the claim this week that inflation was 9% when he was inaugurated, which is not even close to true. The year-over-year inflation rate the month he was sworn into office, January 2021, was 1.4%. And gas prices? $2.39 per gallon. It seems like a generation ago, but it’s been just over three years.
In recent Carolina Journal polls, 80% of North Carolinians say they are spending more on groceries than they did a year ago. As families prepare for summertime activities the cost of everything is going to impact how much they spend in restaurants, on vacation, and elsewhere. However, for those who don’t have those luxuries, they will have to cut basic sustenance for the runaway spending of our federal government.
Inflation is not just frustrating or inconvenient, it is a painful tax on the poorest among us.
