Americans expect food prices to accelerate over the next year as they see their spending on groceries go up in February, data from the Consumer Food Insights from Purdue University shows.
Sixty-four percent of Americans forecast food prices will go up in 2024 as they also expect inflation to be at 3.7 percent. This is higher than where the Consumer Price Index (CPI) inflation currently stands. On Tuesday, the U.S. Bureau of Labor Statistics revealed that CPI rose by 3.2 percent last month, higher than what economists had forecast.
Meanwhile, weekly food expenses rose by 7 percent in February compared to the same time last year to $195. Consumers said affordability was a key consideration when thinking about buying food, the data showed.
"Consumers consistently value taste and affordability higher than any other attribute. This points to the importance of the availability of healthy foods that are also affordable and tasty in fostering good nutrition in the U.S.," the report said. "Those who predict higher food prices in the future tend to value the affordability of their food more than those who predict prices to go down or stay the same."
Looking at food spending, Americans told surveyors that they spend $127 a week on groceries and an additonal $68 at restaurants, bringing their food spending up 2 percent compared to January, 7 percent from the same a year ago. But in what may suggest why Americans are so worried about inflation, compared to two February 2022, consumers were paying 19 percent more for food.
This may also explain why there appears to be a disconnect in the official data on prices and what Americans feel prices will be. In February, inflation expectations ticked up slightly to 3.7 percent event as the CPI data registered food inflation at 2.6 percent, a drop from the previous months.
"The government CPI measure of food inflation continues to gradually drop and level out while consumer food inflation estimates and expectations have remained relatively consistent over the past three months after a drop between November and December," the report said.
Higher food prices could start affecting how much Americans go out to eat. Food away from home inflation was up by more than 5 percent in January on a yearly basis, Consumer Food Insights found.
"Consumers seem to be eating out less as the price of doing so increases," the report found.
Future expectations of food prices were seen through the political lens of respondents, with 56 percent of Democrats feeling prices will be higher in the coming year in February compared to 71 percent of Republicans.
"The majority of consumers have predicted higher food prices when looking at the results from all 26 months of the survey, regardless of political affiliation," the survey found.
The Consumer Food Insights from the Center for Food Demand Analysis and Sustainability at the College of Agriculture of Purdue University is a monthly survey of more than 1,200 Americans from across the country.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
