That’s the title of an article in Bloomberg today.

Here’s a picture of the headline CPI and the “food at home” category.

Figure 1: Headline CPI (blue), and food at home (chartreuse), and ERS forecast based on Jan CPI, all in logs 2021M01=0. NBER defined peak-to-trough recession dates shaded gray. Source: BLS via FRED, ERS, NBER, and author’s calculations.

The article is correct insofar as it uses the past tense — prices of groceries have rise. However, as Figure shows, food at home inflation has declined recently. Figure 2 depicts instantaneous inflation (per Eeckhout (2023), a=4, T-12).

Figure 2:  Headline CPI instantaneous inflation (blue), and food at home (chartreuse), per Eeckhout (2023). NBER defined peak-to-trough recession dates shaded gray. Source: BLS via FRED, NBER, and author’s calculations.

In fact, month-on-month food-at-home inflation was zero in February. USDA’s ERS forecasts 1.6% 2024 y/y inflation in food at home prices, with a prediction interval of -1.8% to +5.3%.

From a sentiment standpoint, food prices are particularly salient because they — like gasoline prices — are encountered by consumers with relatively high frequency.

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