Americans are allocating a larger portion of their income to food expenditures, both at restaurants and grocery stores, reaching levels not seen in three decades.
Recent USDA data indicates that in 2022, American consumers spent over 11% of their disposable income on food, marking the highest level since 1991.
Despite favorable economic indicators like low unemployment and rising wages, many Americans are feeling economic strain due to soaring food costs and overall inflation. The Consumer Price Index (CPI) is expected to decrease to 2.4% annually this year, down from 4.1% in 2023 and 8% in 2022, signaling a continued slowdown in inflation.
Americans are spending more of their money on food than they have in the last thirty years, between restaurants and grocery.
(Photo : by ELIJAH NOUVELAGE/AFP via Getty Images))Americans are spending more of their money on food than they have in the last thirty years, between restaurants and grocery.
Based on the most recent USDA data, it may be inferred that American consumers, whether dining in or out of restaurants, spent over 11% of their disposable income on food in 2022, the highest level since 1991.
Experts claim that despite low unemployment, growing salaries, and stable economic development, many Americans feel depressed about the state of the economy due in part to excruciatingly high food costs and overall inflation. The Consumer Price Index (CPI), which is a basket of popular goods and services, is predicted by the National Association for Business Economists to decrease to an annual rate of 2.4% this year, down from 4.1% in 2023 and 8% in 2022. This year's inflation is likely to continue slowing down.
In the United States, the proportion of revenue spent on food has been declining for years. That started to alter in 2022 when Americans resumed dining out and COVID-19 lockdown regulations started to loosen. However, individuals who prefer eating out have to pay a price for the return to normal. Based on the latest CPI statistics, restaurant costs increased 5.1% in January compared to the same month last year.
In contrast, by the end of 2023, shoppers were spending over 20% more than they had in 2021 for the same grocery basket.
Food and restaurant businesses cite labor expenses as a major reason for pricing increases. 22 states in the US increased their minimum salaries in January, despite the federal minimum wage being stagnant at $7.25 per hour.
Additionally, some politicians and experts claim that food manufacturers have raised prices using the rising rate of inflation as a justification. Last month, President Joe Biden said that businesses are "ripping people off," partly due to their practice of offering less food for the same price, a phenomenon colloquially referred to as "shrinkflation."
Gary Pilnick, the CEO of Kellogg's, came under fire this week on social media after proposing that poor American families have cereal for supper during a Feb. 21 interview on CNBC.
