That’s the title of an article in Bloomberg right this moment.
Right here’s an image of headline CPI and the “meals at dwelling” class.
Determine 1: Headline CPI (blue), and meals at dwelling (chartreuse), and ERS forecast primarily based on Jan CPI, all in logs 2021M01=0. NBER outlined peak-to-trough recession dates shaded grey. Supply: BLS by way of FRED, ERS, NBER, and writer’s calculations.
The article is appropriate insofar because it makes use of the previous tense — costs of groceries have rise. Nonetheless, as Determine exhibits, meals at dwelling inflation has declined not too long ago. Determine 2 depicts instantaneous inflation (per Eeckhout (2023), a=4, T-12).
Determine 2: Headline CPI instantaneous inflation (blue), and meals at dwelling (chartreuse), per Eeckhout (2023). NBER outlined peak-to-trough recession dates shaded grey. Supply: BLS by way of FRED, NBER, and writer’s calculations.
The truth is, month-on-month food-at-home inflation was zero in February. USDA’s ERS forecasts 1.6% 2024 y/y inflation in meals at dwelling costs, with a prediction interval of -1.8% to +5.3%.
From a sentiment standpoint, meals costs are notably salient as a result of they — like gasoline costs — are encountered by shoppers with comparatively excessive frequency.
