There's A Recession? Food Is Expensive?
2008-03-09 15:02 - General
Especially over the past six months or so, the news has been filled with stories about the sub-prime mortgage crisis, the failing US dollar, the US entering a recession, and so on. Fewer, but over a slightly greater period, articles expostulate over the effect that biofuels have on food prices. Even more recently, there have been a flurry of articles about how food is supposedly becoming more expensive. But, is it? I haven't noticed any differences in the price, when I buy food for myself.
I've had about the same eating habits rather steadily for the past few years. I've always purchased my food from one of two supermarkets (save lunch, at work, and the occasional meal out, 'cause it's nice). I've always paid for it with one credit card, to earn the 1% back (why not?). So I decided to figure it out with some numbers: Am I spending more on food? I save all my financial records, so I have all the bills for that credit card back to October 2005.
So, the data is more variable than I would have expected. There was a spike after Thanksgiving last year, I spent a bit on food for that. It's quite a bit more volatile than I would have expected. The (3 month) moving average does hint at a slight upwards trend over the course over just a bit more than two years. A linear fit (not pictured) displays a clear upwards trend, moving from $64.36 to $109.38 per month, over the course of 27 months. (Yes, I was missing one bill, August '06). A 58.84% increase, definitely significant.
That's a definite upwards trend. I must pay less attention than I thought. It's food after all, I have to have it. I'm conservative overall, so I just pick what seems to be a blend of "good deal" against "food I want to eat" and leave it at that. But, does this trend support the thesis that food prices are really rising?
Over the course of two years, I can attribute around 6% increase to inflation alone. Leaving around a 50% increase to account for. I don't have enough data to be conclusive, but I attribute it to a split between comfort spending more in general (I earn a good bit more than I did two years ago), and yes: food prices are increasing. Just, not enough, or not quickly enough, that I consciously realize it.
