Graph of the Day: This Is Why Food Inflation Hasn't Stung the U.S. (Yet)

More

If food prices are spiraling out of control throughout the world, driving inflation in China and even revolution in the Middle East, why do prices seem so stable down at our local grocery stores?


It comes down to two factors, writes Annie Lowrey. First, the weak position of the U.S. consumer has forced grocery stores to offer heavy discounts to keep shoppers flocking. (We'll see how that trend holds up when the economy improves.) Second, Americans consume more processed foods -- like potato chips and hot dogs -- whose price is more determined by marketing and packaging than simple food prices. As Prof. Mark Perry demonstrates with this simple and striking graph of the last 10 years in food prices, crude prices seesaw between plus- and minus-20% yearly changes, while finished goods rarely rise or fall more than 5%.

Read the full story at Prof. Mark Perry's blog.
Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

Sad Desk Lunch: Is This How You Want to Die?

How to avoid working through lunch, and diseases related to social isolation.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Where Time Comes From

The clocks that coordinate your cellphone, GPS, and more

Video

Computer Vision Syndrome and You

Save your eyes. Take breaks.

Video

What Happens in 60 Seconds

Quantifying human activity around the world

Writers

Up
Down

More in Business

Just In