September 27, 2023, 11:34 am EDT
Food Price
US Department of Agriculture (USDA) September 25 released its summary findings on Consumer Price Index for food:
Food prices are expected to grow more slowly in 2023 than in 2022 but still at above historical-average rates. In 2023, all food prices are predicted to increase 5.8 percent, with a prediction interval of 5.4 to 6.2 percent. Food-at-home prices are predicted to increase 5.1 percent, with a prediction interval of 4.6 to 5.8 percent. Food-away-from-home prices are predicted to increase 7.1 percent, with a prediction interval of 6.9 to 7.4 percent. Food prices are expected to continue to decelerate but not decline in 2024. In 2024, all food prices are predicted to increase 2.2 percent, with a prediction interval of -2.6 to 7.3 percent. Food-at-home prices are predicted to increase 1.6 percent, with a prediction interval of -5.5 to 9.5 percent, and food-away-from-home prices are predicted to increase 4.3 percent, with a prediction interval of 1.9 to 6.8 percent.
Although 2024 may look better, the next 3-6 months food prices are still at high levels. It gives consumers pressure for their pockets. Of course, this is an important factor to affect the US economy because nearly two-third of GDP comes from consumer spending.
The prolonged war between Russia-Ukraine and Saudi Arabia and oil exporters cutting supply both add up the cost of transportation and limited supply of agriculture. As long as the war continues, we do not see the rising of food prices to slow down.
Obviously, the stock market will have a hard time climbing higher because overall inflation does not come down for months to come. In our observation, the stock market is likely to suffer primary from the pressure of inflation.
