Sunday, February 6, 2011

Hidden food price inflation?

Food price inflation was a mere 1.5 percent over the past year, according to the Consumer Price Index.  Prices for food items consumed at home rose 1.7 percent, whereas the inflation rate for food consumed away from home was 1.3 percent.  

A recent N&O story pointed out something that friends and family had been noticing for some time: smaller food containers, but no change in price.  For instance some cans that used to be 16 ounces are now 13 (ProPlan Adult) or 14.5 (DelMonte tomatoes) ounces.  Consumer Reports has also done a study on this; they find smaller packages for orange juice, ice cream, dishwashing liquid, paper towels and toilet tissue.  In each case the package is now 10 percent smaller or more. 

I have yet to see a serious study by an economist into whether the Bureau of Labor Statistics has been asleep at the switch.  The most recent CPI press release does show increases in the prices of household paper products (6 percent) and ice cream (4.5 percent) but not much change in other categories. 

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