Friday, November 4, 2016
FOOD PRICES RISE FASTER THAN OTHER GOODS
The average American household allocates 12.6% of its spending on food, both at home and away from home, making food the third largest expenditure category behind housing and transportation. Typically, food prices rise in the same direction as economy-wide inflation, but their magnitudes may vary. But food price inflation has outpaced economy-wide inflation in 7 of the last 9 years. In 2015, food prices increased 1.9% percent, a smaller rise than the 2.4% increase the year before. Declining prices for pork, dairy, fats and oils, and fresh fruit helped ease food price inflation this year. But economy-wide inflation measured just 0.1% in 2015, in large part due to a 7.8% drop in transportation prices as a result of lower oil prices.