Food Hasn’t Impacted Your Budget This Much in Decades

Historically High Prices

The post-pandemic inflation peak we all just lived through has left its mark on American wallets. Even though the pace of price hikes has moderated, there’s one particular area of spending that is eating up a lot of your budget… excuse the pun.

In 2022, Americans spent more than 11% of their disposable income on food, according to the USDA. The last time the share of food spending was this large was about 30 years ago, in 1991.

Shrinkflation

Even if sticker prices haven’t risen as much in your area, you may be getting less bang for your buck, thanks to shrinkflation. In this phenomenon, portion and packaging sizes are reduced while the price stays unchanged.

Shrinkflation has become so prevalent that even President Joe Biden called out America’s largest food makers.

Many food companies have pointed to higher wholesale costs for things like sugar and beef to defend the climbing cost of their products. Minimum wage has also ticked higher in many states, which added to the costs for companies, which they may pass onto consumers.

Food price hikes tend to be sticky, which could mean that the share of your income spent on food will stay elevated for a while.

Read more reporting here .

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