Multiple factors explain the rise in food costs, ranging from constrained beef supplies to tariffs and bad weather for coffee.
This article first appeared in CBS MoneyWatch.Â
Although inflation has cooled markedly since U.S. prices surged during the pandemic, high food costs continue to give consumers a stomachache.Â
Food prices, which outpaced overall inflation for much of last year, rose in December at an annual rate of 3.1%. That remains significantly above the 2.7% for all goods, according to the latest Consumer Price Index data. On a monthly basis, food prices rose 0.7% last month — the largest jump since September 2022.
It’s not just grocery runs that are denting Americans’ budgets. Dining out is also getting costlier. The Labor Department’s measure for this, known as “food away from home,” in December rose at an annual rate of 4.1%, compared with 2.7% for inflation overall.Â
Joe Hannon, general manager of inventory and purchasing at Restaurant365, a cloud-based management platform for restaurants, attributes the higher prices to rising labor and utilities costs.
“Operators aren’t raising menu prices because of a single spike, but because multiple costs are staying higher at the same time, squeezing margins that were already thin,” he told CBS News in an email. “That’s why menu prices have continued to rise faster than overall inflation, even as some headline numbers begin to cool.”
Read the full article at CBS MoneyWatch.Â
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