Food cost compared to income is highest in 30 years

article

FILE-People shop at a grocery store in New York City. (Photo by Spencer Platt/Getty Images)

Dining out at restaurants and buying groceries has become so expensive that it's eating up a sizable portion of Americans' paychecks.

A U.S. Department of Agriculture report reveals that people spent 11.3% of their income on food in 2022, the highest level in over 30 years.

The share of disposable income spent on food in 2022 was divided nearly equally between eating at home (5.62%) and dining at restaurants (5.64%).

When COVID-19 restrictions were lifted in 2022, more people started eating out at restaurants, the report noted.

And with more consumers continuing to dine out, this contributed to a spike in restaurant prices. According to Bureau of Labor Statistics data, restaurant prices in January 2024 increased to 5.1% compared to 2023.

Fast-food prices were also higher at 5.8% over the past year, with restaurant and food companies attempting to manage higher labor and product costs as 22 states raised their minimum wage in January 2024, the Bureau of Labor Statistics noted.

Consumers also dealt with high prices at the grocery store with a surge in costs for some products.

In 2023, the prices for fats and oils increased by 9% while the cost of sugar and sweets spiked 8.7%. According to the Bureau of Labor Statistics, the rate of price increases for cereals and bakery products was 8.4% in 2023.

But the only food item that dipped in price in 2023 was pork, which was 1.2% cheaper compared to 2022. Meanwhile, meat prices saw a slight increase. Beef and veal prices increased 3.6%, while eggs were 1.4% more expensive in 2023 compared to 2022, the USDA noted.

Separately, the cost of fruits and vegetables increased 0.4%, while dairy and related products increased 0.2% in January, the Bureau of Labor Statistics reported.

This story was reported from Washington, D.C.

Money Consumer Economy Food and Drink