Food Prices and Household Budgets

New CPI data show U.S. food prices rose 0.7% in December 2025—the biggest monthly increase since September 2022—and are now nearly 19% higher than they were in January 2022, keeping groceries a major pain point even as overall inflation cools. On a year-over-year basis, food prices climbed 3.1% in December, outpacing the 2.7% rise for all goods, with beef and coffee among the biggest drivers: ground coffee averaged $9.05 a pound versus $6.78 a year earlier, and boneless sirloin hit $14.03 a pound, up from $11.67. A Democratic Joint Economic Committee report cited in the piece estimates the typical household spent $310 more on groceries in 2025 than in 2024, while categories like romaine lettuce, frozen orange juice concentrate and even bananas all saw notable price hikes. Economists point to constrained beef supplies, tariffs and weather shocks in coffee-growing regions as key pressures, even as Trump’s November food-tariff cuts have yet to filter through to store shelves. Restaurant meals are rising even faster—"food away from home" was up 4.1% annually in December—driven by higher labor and utility costs, with operators raising menu prices to protect already thin margins.