Good news if you like peanut butter and coffee: You're paying less today for both than you were a year ago.Peanut butter prices at the end of September were down 7.1% from the same month in 2012, and roasted coffee was lower by 7.3%, so grab a spoon and brew some java. Now for the unfortunate part — those are among the few items on the grocery store shelves that have seen declines.
Yes, most of the food and beverages we consume — north of 70% of all those detailed by the federal government — cost us more today than they did last year at this time, with the goods on the rise overpowering, for many of us anyway, those cheaper items we might be finding. Potatoes have had the biggest increase, up 13.2%, and bacon is another large mover, with prices higher by 9.3%.
On the whole, food prices have climbed 1.4% over the past year, the Labor Department said recently. If you bought food to eat at home, that required 1% more out of pocket, while dining at a restaurant, not surprisingly, took a greater toll, costing you 1.9% above what it did a year earlier.
With food prices, start by looking at supply and demand at the base commodity that goes into it. Often, if you have a larger-than-expected crop of some item, prices will drop for it and the processed goods that follow. When output takes a dive, prices tend to go up. Also remember that inflation has a way of occurring regardless.
An excess of peanuts and cheaper-to-get raw coffee beans were behind the decliners mentioned here. As for some of the price gainers, a pig virus has been killing off animals, reducing the amount of available pork. (The potato industry, meanwhile, is actually seeing litigation claiming that growers have conspired to elevate prices.)
We're also paying up for vices. Cigarettes set you back 3.2% more than this time a year ago, and alcohol prices are 1.7% ahead. You do get by easier drinking at home, where prices have advanced 1.3%, though if you like to drink a lot of whiskey, your brain isn't the only thing taking a hit — it costs an added 2.5% now. Going down to the local tavern? Drinking out costs have risen 2.3%.
Taken together, food items outpaced the latest consumer price index change, which showed a 1.2% increase over the past year. Prices excluding food and energy, the "core" rate of inflation that removes these two components that are known for sizable swings, were up 1.7%.
Here are a few common items and their year-over-year price changes. Have a look, and let us know where you're paying noticeably more, or less, than you did last year.
Source: Bureau of Labor Statistics. Percent changes are unadjusted and detailed in the Consumer Price Index for All Urban Consumers (CPI-U).
- Consumer Discretionary