U.S. Grocery Prices See First Decline Since 2020

Edited by CBS News Team

Persistent high grocery costs have become a significant burden on American households, with economic conditions and inflation influencing voter concerns as recently as the November elections. However, encouraging signs have emerged as some grocery prices slightly decreased in October for the first time in four years.

Data from Adobe's Digital Price Index shows a 0.1% reduction in online grocery costs compared to the previous year, marking the first such decrease since January 2020. This period predates the pandemic's impact that resulted in soaring inflation and disrupted the U.S. economy.

Prices for groceries purchased online reflect what consumers are charged when using platforms like Walmart and Whole Foods' apps and websites.

It's important to note that online shopping for groceries constitutes a small fraction of the total food purchases by Americans—about 20% of shoppers bought their groceries online in 2022, as reported by the U.S. Department of Agriculture. Yet, the decline in October indicates that consumers might soon experience more affordable prices in stores, supported by a Credit Karma survey from May showing that around 25% of Americans skipped meals due to high food costs.

Overall food inflation has stabilized after reaching its pandemic-era height of 13.5% in August 2022. By September, the cost of groceries for home consumption increased by 1.3%, lower than the Federal Reserve's long-term inflation goal of 2% annually. The USDA anticipates that food prices for home consumption will rise just 1.6% in 2025, indicating a likely stability.

Beyond groceries, October saw online prices across various categories decrease by 2.9% year-over-year, with notable declines in clothing and toys, which dropped by approximately 10% and 4%, respectively.

Anticipations for the Upcoming Consumer Price Index Report

The Consumer Price Index for October is scheduled for release on November 13. Projections from economists, gathered by FactSet, suggest a potential inflation rate of 2.6% for last month—an increase from September but a significant drop from the same time last year when prices were on the rise.

The gradual easing of inflation has prompted expectations that the Federal Reserve might lower interest rates further at its December meeting, as proposed by economic forecasts.

Aimee Picchi, CBS MoneyWatch's associate managing editor, specializes in business and personal finance reporting. Her past experience includes roles at Bloomberg News, and her written work has featured in national outlets like USA Today and Consumer Reports.