Updated Feb 14, 2024 - Economy

Rising inflation boosts dining out past eating in

U.S. food inflation
Data: BLS; Chart: Deena Zaidi/Axios Visuals

Food prices are gradually normalizing but the cost of dining out remains high, feeding consumer angst about the economy.

Driving the news: January's consumer price index data released on Tuesday showed overall food inflation rose slightly in January. Meanwhile, dining out inflation is moving ever higher, reversing a COVID-19 era phenomenon that saw spiking grocery inflation surpass price shifts seen in restaurant eating.

Why it matters: Ongoing sticker-shock at grocery stores and restaurants is the main reason consumers are glum about the economy, despite strong growth and employment.

  • It underscores how the path to inflation below 2 percent will be a bumpy ride, as Axios Macro's Courtenay Brown writes.

Context: The current inflation rate is 3.1 percent, still above the Federal Reserve's overall target rate of 2 percent.

  • The cost of food outside the home is up 5.1 percent year over year for January, a slight dip from 5.20 percent last month. At the same time, the cost of food at home is up 1.2 percent over the last 12 months.

Flashback: In August 2022, overall food inflation peaked at 11.4 percent, with food at home rising at 13.5 percent. In its recent summary of findings for 2024, the U.S. Department of Agriculture (USDA) expects overall food prices to increase 5.8 percent, with 7.2 percent gains for the food away from home category.

Yes, but: Selected categories showed moderating or declining year-over-year inflation which included cereal and bakery products (+1.5 percent).

Editor's note: This story and headline have been corrected to note that the rate of dining out inflation (not the absolute price) has topped the rate of inflation for eating in.

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