Why experts say inflation is relatively low but voters feel differently

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A report from Purdue University found that a majority of consumers expect food prices to keep rising in the coming year, which could sour voter sentiment. / Getty Images

A lot goes into planning a personal budget – and the price of food and how it fluctuates with inflation can be a big part of that.

According to the U.S. Department of Agriculture, food prices rose by 25 percent from 2019 to 2023. And a report from Purdue University found that a majority of consumers expect food prices to keep rising in the coming year.

Are food prices as bad as consumers think?

All Things Considered host Ailsa Chang spoke with Joseph Balagtas, a professor of agricultural economics at Purdue University and the lead author of that report.

This interview has been lightly edited for length and clarity.

Ailsa Chang: The majority of consumers are predicting rising food prices. And, yeah, we definitely saw a hike in food prices during and after the pandemic. But what is actually happening right now with food and grocery prices? Are things as bad as some consumers fear?

Joseph Balagtas: So the Bureau of Labor Statistics just two weeks ago released its latest inflation data from the Consumer Price Index [CPI]. Food prices in March were 2.2 percent higher than they were in March 2023. So a 2.2 percent increase in food prices over the past year.

Chang: And how bad is that?

Balagtas: That is relatively low. Low relative to the food price inflation that we've seen over the past two years. Food price inflation peaked in the summer of 2022 at about 10 or 11 percent per year, and has been coming down regularly, has been under three percent in 2024 and is at its lowest point – 2.2 percent – that we've seen since [the] end of 2021.

Chang: Yeah. And it being 2024 now, an election year, your report also looked at how people's political leanings affect their view of inflation. I'm so curious what you saw there.

Balagtas: Yeah. So we asked people in our monthly survey to tell us how food prices have changed over the past year. And it gives us a measure of perceived inflation that we could compare to the CPI. And interestingly, for the last eight months, consumers have been reporting price inflation in the range of six and seven percent, well above what food price inflation has been, according to the CPI.

Chang: And how did that pessimism break down according to political affiliation?

Balagtas: It's not only a political issue. Both Democrats and Republicans tell us if inflation is higher over the last year than what we're seeing in the CPI. But Republicans are reporting an inflation that's ... one percentage point and a half higher than Democrats. So Republicans are telling us 7.3 percent higher, Democrats 5.7 percent higher.

Chang: Okay. Regardless, though, both sides are overstating food inflation. Why do you think that is? Why do you think consumers across the board seem to be overestimating how much food prices are going up?

Balagtas: It could be that consumers – they're not measuring prices relative to exactly a year ago, which is what the Bureau of Labor Statistics does when it reports 2.2 percent inflation. So they might be looking at a longer time horizon. They might be thinking back to a time, you know, "remember when egg prices were such-and-such". We don't necessarily live in one month and 12 month increments like the CPI is reported.

Chang: And how much do you sense food prices drive the way voters actually vote?

Balagtas: Yeah, well, so I think the economy in general affects presidential elections. I think good economic conditions help the incumbent, bad economic conditions harm the incumbent. You know, we haven't seen food price inflation like this in an election year in some time. And so I'm not quite sure how to predict how that would be. But I think if price inflation in general were to increase again over the coming six months, I think that'd be bad for the incumbent.

Chang: And as we get closer and closer to November, do you expect food prices specifically to be a major thing that all the candidates will be talking about?

Balagtas: I'd say that most of the drivers of higher food prices have gone away. The one that's lingered is high labor costs. And so we see sustained higher prices or faster inflation in items that are labor intensive, including restaurant meals and packaged foods. So we're going to see higher food prices in some items. I don't think – and I certainly don't hope – that we return to the fast food price inflation that we saw last year or the year before.

The radio version of this piece was produced by Elena Burnett and edited by William Troop.