While inflation is not as extreme as last year, it is still present and grocery store prices have still been somewhat variable.Economist Bernt Nelson with the American Farm Bureau Federation. On Tuesday, the United States Bureau of Labor Statistics released its report on October’s Consumer Price Index (CPI), reflecting important data on the state of inflation (high inflation = your dollar buys you less).
Bottom Line: While the rate of inflation is moderating, it remains above the U.S. government’s goal: targeting “an annual inflation rate of 2% …” (Investopedia).
Why It Matters: The CPI measures a mixed basket of costs of goods and services in the U.S., and is used as an important gauge of inflation. The rate of inflation in October remained unchanged from the previous month, while still measuring 3.2% higher than last year at the same time.
Core inflation (“core CPI”) – seen as a better gauge of inflation because the measure strips out volatile food and energy prices – showed prices in October slightly increasing from September but at a slower rate than previous years.
A decline in energy prices has helped lower prices while costs increased in shelter (housing, rent), medical care and transportation services (motor vehicle insurance, parking fees and tolls).
Looking Ahead: The data provides helpful information on the potential cost of upcoming Thanksgiving dinners. Overall, food prices have increased from last year, with bakery products up 4.9% on a year-over-year basis. However, the cost of eggs, have decreased from 22.2% from October 2022 (though up slightly from Sept.). The cost of vegetables has also decreased, while a recent report from the U.S. Department of Agriculture shares, “Just in time for the 2023 holiday season, wholesale prices of whole frozen turkeys are declining. Prices for frozen whole hens—the birds typically served for holiday dinners—averaged $1.27 per pound in August 2023,” which is 22% lower than prices in August 2022. The Agriculture Dept. adds, “Prices dropped further to $1.25 per pound in September, down 43 cents from a year earlier, and the lowest monthly average price since July of 2021.”
Consumer Price Index Summary (U.S. Bureau of Labor Statistics)
by Leah Grainery, based in Texas