Food prices → US inflation

Common explanation (Knock-on · same direction): Food prices push up food inflation (food weighs heavily in emerging economies).

This issue: Food prices at 61 (warm), US inflation at 64 (warm) — both above normal, in line with the common explanation.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

Where it stands now

Where the two indicators stand this issue

Food prices: 14.8% above its 10-year average. US inflation: 0.41 percentage points above its 10-year average.

Tests

Does this link hold up?

Common explanationFood prices push up food inflation (food weighs heavily in emerging economies)Source: International Monetary Fund, “Four Facts about Soaring Consumer Food Prices” (2021).
Tested against our dataAgreement between the positions of Food prices and US inflation (9-month lag), measured in the direction of the common explanation: +0.32. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in 26 of 42. Weak or inconsistent
Periods when it did not holdAcross 42 5-year periods, out of step in 1982⁠–⁠2010 and 2011⁠–⁠2019.

History

The two lines, overlaid

Data: World Bank Pink Sheet price indices (CC BY 4.0); US: Bureau of Labor Statistics, via FRED (Federal Reserve Bank of St. Louis); Japan: World Bank Global Economic Monitor (CC BY 4.0); others: OECD. Positions: our calculation.

Food pricesUS inflation

Limits

What this card cannot tell you

Moving together does not prove that one causes the other.
Links change over time; periods when this one did not hold are listed in full.
This is the historical record, not a forecast.

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