The economy is still in flux due to the disruptions of the COVID-19 pandemic, and food may become particularly hard to shop for in the coming months. At the end of December, The Wall Street Journal published the findings of some economic experts who said that inflation is coming particularly hard for food in the first half of 2022. This includes everything from fresh produce to shelf-stable items.
The WSJ covered a study by an economic research form called IRI, which estimated that food prices in general will rise by about 5 percent in the first half of this year. The study focused on bread, dairy products, snack foods and condiments, among other amenities. The WSJ also spoke to supermaket executives who had some insights on this impending inflation. They pointed to a wide variety of factors including the costs of manufacturing, shipping, packaging and labor at every level.
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By now, most people realize this is not an isolated incident. Earlier this month, the U.S. Bureau of Labor Statistics noted a 6.8 percent increase in the Consumer Price Index from November of 2020 to November of 2021. This was the largest yearly increase since 1982 according to a report by CNET, and food items were among the most heavily impacted. Food-at-home prices rose 6.4 percent overall, with meat, poultry, fish and eggs increasing the most – 12.8 percent.
The consumer is likely to pay for these price increases either at the grocery store or at restaurants, though the grocery prices are of particular concern considering the current surge in COVID-19 cases. Many people will be isolating at home in the weeks and months to come, which means that they will be stocking up on food and preparing it for themselves. Inflation on these items not only impacts their bottom lines but can lead to panic for some people.
Right now, the Federal Reserve is taking steps to slow or stop this inflation trend in broad terms, at least. According to CNET, the agency will start cutting back on asset purchases in January with the intent of stopping asset purchases altogether by March of 2022. This will allow the Fed to increase interest rates sooner, which will in turn raise the cost of borrowing money. The intended result would be to reduce economic demand and balance the forces of supply and demand somewhat.
As always, economic experts are at odds over these measures. The conversation continues in op-eds, on talk shows and on social media. Always consult a qualified financial expert before making any major decisions based on economic reports.
