Inflation slows down, but food prices are still very high that some can’t simply not afford anymore

The release of the Consumer Price Index on Tuesday may come as disappointing news to shoppers who were looking for some relief at the grocery store in preparation for their holiday feasts. The consumer price index shows that inflation is slowing, but food prices continue to be high, particularly for several seasonal necessities.

In November, the Consumer Price Index (CPI) climbed by 0.1%, which was a lower increase than some experts had anticipated. It had a 7.1% increase over the course of the previous year. The cost of food increased by 0.5% in November, following an increase of 0.6% in October. In comparison to the previous year, the food index experienced a gain of 10.6%.

According to David Ortega, an associate professor in the department of agricultural, food, and resource economics at Michigan State University, “The headline inflation numbers are promising for the general economy, but consumers are not being comforted at the grocery store.” We anticipate that November will be the ninth straight month of double-digit inflation in the cost of food and household goods. The cost of food and other necessities is currently 12% more than they were a year ago.

According to a study of government statistics conducted by Marketwatch, the cost of food increased by 11.4% in August compared to the same month the previous year. This marks a level that has not been observed since May 1979.

Ortega continued by saying, “The good news is that food price increases and grocery price increases reached their pinnacle in August,” and “They are just slowly starting to come down.” Because inflation measures the rate of price increases over time, just because the inflation rate starts to calm down a bit does not mean that things are getting cheaper. Although we are moving in the right direction, consumers are still not feeling relief at the store. This is because inflation captures the rate of price increases over time. The prices just aren’t going up quite as swiftly as before.”

According to Ortega, higher food prices are being caused by a number of factors, including disruptions in supply chains, the conflict in Ukraine, climate change, the deadliest outbreak of bird flu in the history of the United States, increased consumer spending on food, and the cost of transportation.

We are seeing difficulties in our supply chain, but they are beginning to improve as a result of the pandemic. But then there is the situation in Ukraine, which brought about a spike in the price of commodities at the beginning of this year. The prices of these have drastically dropped, but it will take some time before shoppers at the grocery store notice the difference.

According to him, climate change has also had an effect on agricultural production, which has resulted in there being less food available on the market and prices going up. Ortega stated that it is difficult to predict when food costs will begin to begin to come down, but he anticipates that it might happen sometime within the next six months or so. In a report that was published in October, the International Monetary Fund stated that hikes in the interest rate that the Federal Reserve will be charging will “place downward pressure on prices through the end of next year.”

According to Donna McCallister, an assistant professor in the school of agricultural and applied economics at Texas Tech University, prices tend to go up at this time of year. This is making the situation even more difficult for many people in the United States this month. According to an investigation into the prices of Christmas necessities that was conducted by Bankrate on November 23, six out of ten of the most exorbitant prices were for food. These prices included turkey, bakery items, eggs, flour, and prepared mixes.

Consumers who are shopping for a frozen pie, making sugar cookies for a party, or preparing a Christmas ham this month will discover that prices are much higher than they were the previous year. The Consumer Price Index shows that the price of ham has increased by 7.8% over the past year, the price of frozen and refrigerated baked products has increased by 19.4%, and the price of eggs has increased by 49.1%.

People go out and purchase items like eggs, butter, and wheat for their cooking, so there’s also a demand story here as well, said Ortega. “A lot of that has to do with the cost of production and transportation,” he added. “But also, rising demand for these things like butter.”

In order to reduce the amount of money that is wasted on food during the holiday season, McCallister recommends making more frequent trips to the grocery store for specific meals, purchasing some goods in bulk, and moving from name brands to store brands of similar products.

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