Food Policy Bites: Food at Home Price Index Declining But Prices Likely Remain Above Pre-Pandemic Levels in 2023
Food Policy Bites Issue #3: The percent change in the Consumer Price Index (CPI) for food at home (FAH) over the last 12 months hit a record high of 14% in August 2022 but it has been easing since then. If this declining trend continues in the next 12 months, how far FAH CPI could go and how is it compared to previous years? Based on historical data that go back to 1977, we examine four different scenarios that assume different rates of decline in FAH CPI. Results show that FAH CPI in 2023 could increase by 4% to 8% from its level in 2022, though even at an increase of 4%, the index remains 24% higher than its 2019 level. For consumers, a downward trend in FAH prices is a good sign to look forward to in the new year, but it is also wise to be aware that a pre-pandemic price level won’t likely happen next year.
Food Policy Bites are easily-digestible food policy insights supported by economic data analytics and analyses.