If you are concerned about higher prices impacting your quality of life, may I suggest an evening in sewing: sewing machines, fabric, and supplies are 6.4% cheaper than a year ago. Treat yourself to a bottle of wine (1.2% cheaper) and a pint of ice cream (0.7% cheaper).
I have given a couple of community presentations recently and been asked the same question twice: Why does the inflation data not include prices of food and energy? In fact, the headline inflation figure does include food and energy, although the government agencies also calculate an inflation rate excluding food and energy. Last Friday, the Bureau of Labor Statistics (BLS) released inflation figures for September, the only economic news release since the government shutdown. The headline inflation rate came in at 3%, and the inflation rate excluding food and energy was also 3%. The inflation rate in the South census region was slightly lower at 2.7%.
The largest monthly increase last month was in gasoline prices, which increased 4.1% from August, but gas prices are 0.5% lower than in September 2024. Food prices in general increased 3.1% over the last year, with meats, poultry, fish, and eggs driving most of that increase, increasing at 5.2% annually. Most of this increase was driven by beef prices, which are up 13-18 percent over the last year. Coffee prices are up 19% over the last year, and candy prices are up 10%, just in time for Halloween!
The BLS publishes an inflation figure excluding food and energy because those prices are volatile and may not represent persistent inflation. For example, gasoline prices are highly correlated with oil prices, which can be influenced by global events. Agricultural prices are often influenced by weather conditions in each harvest season. Cocoa, used to make chocolate, has been hit by poor harvests in Ghana and the Ivory Coast, who produce most of the world’s cocoa.
Coffee and beef price increases are a combination of weather and climate issues, as well as a recently imposed 50% tariff on imports from Brazil, a major supplier to the U.S. of beef and coffee. However, the overall impact of higher tariffs remains muted.
