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Grocery Inflation is Low, but Why Do Consumers Feel It Is High?

Author

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  • Kim, Ashley Jiyoon
  • Yoon, Sungeun

Abstract

In the United States, the inflation rate hovered around 2% for decades, aligning with the Federal Reserve’s target for a stable economy (US BLS, 2024). However, the disruptions in both demand and supply chains from the COVID-19 pandemic and the Russia–Ukraine conflict led to high levels of inflation, from 4.1% to 9.1%, between April 2021 and May 2023. As shown in Figure 1, food prices were more unstable; for that reason, they are excluded from core inflation calculations (along with energy prices). Specifically, the price index of food at home (FAH) is more volatile compared to that of food away from home (FAFH) and of all items. FAH inflation was minimal and stable at less than or around 1% before experiencing moderate to high fluctuations in 2020 and 2023, peaking at 13.5%.

Suggested Citation

  • Kim, Ashley Jiyoon & Yoon, Sungeun, 2025. "Grocery Inflation is Low, but Why Do Consumers Feel It Is High?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 40(1), February.
    • Handle: RePEc:ags:aaeach:350110
    DOI: 10.22004/ag.econ.350110
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