The CPI was up more than expected in August. Food played a role.
The BLS CPI report for August shows the price of food and beverages jumped 0.5 percent with food at home rising 0.6 percent.
Six CPI Food Categories Month-Over-Month
CPI Food Category Month-Over-Month Details
- Food and Beverage: 0.5 percent
- Meat, Fish, Poultry, Eggs: 1.0 percent
- Cereals and Bakery: 0.1 percent
- Dairy: 0.1 percent
- Fruits and Vegetables: 1.6 percent
- Nonalcoholic Beverages: -0.7 percent
If your food basket in August was nonalcoholic beverages, cereal, and dairy, congratulations.
If your basket was fruits and vegetables, or meat, fish, poultry, and eggs, you had another bad month.
CPI Food at Home vs Away from Home Year-Over-Year
At Home vs Away, Year-Over-Year
- Food at Home: 2.7 percent, up from0.9 percent in August of 2024
- Food Away from Home: 3.9 percent, up from 3.4 percent in January of 2025.
- All Food: 3.2 percent, up from 2.1 percent in May of 2004.
CPI Food Categories Year-Over-Year
- Meat, Fish, Poultry, Eggs: 5.6 percent, up from -0.9 percent in January of 2024
- Cereals and Bakery: 1.1 percent, up from -0.5 percent in November of 2024
- Dairy: 1.3 percent, up from -1.9 percent in March of 2024
- Fruits and Vegetables: 1.9 percent, up from -0.9 percent in April of 2025
Expect a sustained spike in fruits and vegetables due to tariffs and deportations.
Screwed Up Measures of Inflation
These CPI and PCE reports are all worse than they look because both are very screwed up measures of inflation.
For starters, the BLS incorrectly underweights food away from home.
For discussion, please see Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?
Does the BLS match your budget?
BLS miscalculations on shelter are even more pronounced.
Is Homeowners Insurance Understated in the CPI?
I discussed very serious errors in the BLS calculation of shelter inflation in Is Homeowners Insurance Understated in the CPI? Shop Around!
Our Insurance went up by $2,000. Then another $2,000. Here’s our story.
The BLS does not factor in homeowner’s insurance at all, only a home’s contents.
No Reason to Cut Rates
Earlier today I noted CPI Provides No Reason for Fed to Cut Interest Rates, It Will Anyway
The CPI was higher than expected in August, but the Fed will do what it wants to do.
The Fed always does what it wants. It uses its dual mandate as an excuse. This time there is added pressure from Trump.
However, the labor market is weakening fast. This gives the Fed cover for a series of cuts if it wants.
We spend about 8% of total expenditures on food. We seldom dine out. We eat very well and basically ignore prices. Food inflation is a minor mental annoyance for us and we are not changing our habits.
US econ buyback. Within a few years the boomers and gen X are gone. The labor
force participation rate might rise to 68%, the econ will flourish, but the US GDP will stall. More goodies to prime age people, less for the elderly. Higher rates protect small businesses from wall street raiders. Higher tariffs protect small businesses from China.
If the American cont to eat healthy food pharma made in the US will be malinvestment.
– If your food basket in August was nonalcoholic beverages, cereal, and dairy, congratulations. > I agree, as Non-Alcoholic beverages should always be consumed, much, much more often than Alcoholic (which you may become as a result (I Did, but am sober now, and have been for a long time), which is a much, much bigger issue Financially & Health-wise!! The proper cereal is a wonderful replacement for Donuts, danishes, and the like, and you will ditch the sugar. Milk & Water should be the primary sources of fluid for your body when young, and a lot of water when your old especially. Dehydration is not a good thing for your body to have to tolerate.
– If your basket was fruits and vegetables, or meat, fish, poultry, and eggs, you had another bad month. > Not necessarily, as other choices are available and cheaper too. Mostly Protein is a source from meat and fish, but you can get that everywhere now. Not good food necessarily, but Waffles even have it now. Protein bars are fairly inexpensive in comparison too. Protein shakes (homemade) even more so. I use both as part of my diet. Eggs are the cheapest of everything mentioned for what you get all around in varying dishes, and protein. I eat a dozen a week minimum. I find my grocery bill has gone down as a result of good choices and watching prices.
>> Food at Home is a no brainer for most everyone and in every example. If you don’t like to cook, then learn quick easy recipes and you’re off and running immediately. I do a lot of stir fry’s, as they are fairly easy to do (once timing is down). They are a fantastic way to use up leftovers, and you can add Protein in various forms to every dish (keep beans in the house). I usually leave a chunk of meat to chop up and add in too from a prior meal.
>>> There are little devices you can purchase to grow veggies inside. I have 2 of them (Lg & Sm), and I grow flowers in between in the Winter Months for the table too. They are not overly expensive and last forever. For fruit, if you don’t like Bananas then learn to. A very cheap food that you can make sandwiches with peanut butter (Potassium and protein) and they are terrific (old time thing), and they are used in nearly every smoothie I make, along with Cantaloupe and Baby Spinach.
>>>> There are ways to save money and not give up Protein and/or flavor. I have been doing it for years!!!
Consumption of fruits and vegies was rising 1.6% M/M. That’s a good thing.
More fruits and vegies less docs & pharma.
Sticky inflation report unlikely to keep Fed off course for rate cut next week
https://finance.yahoo.com/news/sticky-inflation-report-unlikely-to-keep-fed-off-course-for-rate-cut-next-week-143934344.html
Now that the illegals are gone, there should be more pets surviving!
The Donald “They are eating peoples pets!”.
No wonder world leaders are laughing at Trump and his tariffs. Americans pay more for less, while world trade grows and our competition flourishes.
Elections have consequences!
>>
I’ve seen reports of negros from foreign lands eating swans, ducks and other wildlife of parks and the lakes within.
Life expectancy in Africa is rising. More 80’s and more children. Supply is rising.
Supply of what?
From the “Tell me you’ll believe anything without using those words” files
One of them invader negros actually gave me a speech in a French municipality telling me how white French men are homos; and that they will kill them all and rape their women.
These were mainly the African sort dispatched to Europe by zio NGOs (Soros, Barbara Spectre).
The ones eating animals in their public parc habitats were recent imports from the Caribbean to the US.
That’s one thing I agree on with Trump. However Trump is a stupid and dishonest POS for not acknowledging that his very zionist patrons and handlers are the same people behind those fake NGOs importing these invasive and dangerous species who hate us into our midst.
They are not gone. The invading brigades were stopped.
Cutting rates wont do anything. Subprime collapse has started with homes and autos.
Jobs are being taken away by AI/automation/robots. Even white-collar jobs now. TPTB and most economists refuse to understand this.
One thing lowering interest rates will do is make it cheaper to buy robots and deploy AI to eliminate more human jobs.
Subprime is always prone to collapse. They are lending to people with minimal financial resources and terrible credit!
Trump’s tariff basically destroyed the buying power of the US dollar, inflation and rates will only increase from here as Yuan replaces the US dollar everywhere.
Nope. 37 trillion of debt and weaponizing the USD the past 15 years.
Also, Congress approves all budgets. Congress has spent 37 trillion dollars. Not one president. Most of the budget is mandatory by law and those laws were decided years ago. That is where the blame needs to go. Plus…. The Inflation Reduction Act and the Big Beautiful Bill are not helping the USD at all.
How can that Yuan replace the dollar when its literally pegged to the dollar and China has no intentions to let it’s currency float?
Debt swap. Only the Chinese people could come up with something this ingenious,
And if farmers go bankrupt this fall, how will that impact food prices moving forward?
We already know that electricity rates will soar next year, especially with Trump canceling wind and solar projects. If the fed starts cutting rates, housing prices may explode again. If housing goes up, property taxes and insurance rates will continue to climb.
With Trump deporting all the cheap construction labor, home maintenance will skyrocket as well – carpenters, plumbers, electricians, etc will all command premium pay.
Throw in demographic death spiral and things could get real interesting real fast.
“It’s Trump turtles all the way down and inflation all the way up!”
Trump and the GOP will own this 100% and midterms are a year away.
Except for the Dems inability to understand that the world has changed and of course, their usual proclivity to blow off their own legs when they attempt a strategy.
Great comic here!
I never said the Dems would fix anything. People keep making that mistake about me, the binary thinkers assume that if I don’t like Trump policies I must automatically love dem policies. Only two-dimensional birdbrains think like that, I don’t.
For some reason many don’t understand that this is a libertarian blog. Trump is a communist and dems are moving full socialist. There are no choices in America anymore.
Got exit strategy?
> Only two-dimensional birdbrains think like that
ONE-dimensional! Two dimensions gives you politicalcompass.org
> Trump is a communist and dems are moving full socialist
The establishment is fascist. Until the day insider-trading Pelosi passes legislation imposing 99% clawbacks for all the trillions of QE and bank bailouts that fell into the hands of international oligarchs, the Disgustocraps are not communist/socialist.
The Republithugs have the easier acting job of relatively blatantly serving the oligarchs. The other party exists to make socialism and communism look as stupid as possible. (And they succeed brilliantly.). They both serve the same donors.
“…The establishment is fascist…”
Finally a commentor on this blog that gets it. Hardly anyone gets this right. Bravo!!!
> many don’t understand that this is a libertarian blog
God bless Mish. I know other “libertarians” who line up for most of the optional wars and vote for the GOP. …smh
The 24 Types of Libertarian
June 29th, 2010
https://leftycartoons.com/2010/06/29/the-24-types-of-libertarian/
U.S. farmers receive tens of billions of dollars in government subsidies annually, and 2025 is shaping up to be a record-breaking year due to expanded disaster aid and policy changes.
💰 Estimated U.S. Farm Subsidies in 2025
• Total subsidies are projected to exceed $75 billion.
• This includes:• $31 billion in direct payments from the American Relief Act of 2025
• $42.4 billion in disaster aid, a staggering 354% increase from 2024
• $5.1 billion in conservation payments, up 15.1%
• Expanded crop insurance subsidies, including new pilot programs for poultry growers
So that is why we do not hear more gloom and doom from the agriculture sector.
Actually, there are plenty of reports and youtube videos of exasperated farmers. Maybe not front page news, but a lot of farming communities are struggling.
And there will always be many individual farmers who struggle. Particularly when their major export markets have been shut down. Government subsidies, while helpful, have limits, and rarely make farmers whole. But subsidies do help reduce the number of bankruptcies.
As some here have recently mentioned, government does have a role to play in subsidizing critical industries. And farming would qualify as critical.
And the bulk of that money comes from New York or California, specifically tech cities or Wall Street. The system is insane.
https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP
The insurance industry shares risk.
Government shares wealth.
That’s where the tariff money should be going. A couple months worth at 30 billion a month will cover most of the subsidies and protect a critical industry as you noted below.
Yep. That is one role of government here, just like in other countries. Support the farmers as it is a critical industry. (I don’t think it matters much if the source is tariffs or other taxes. That is a moot point.)
I see the UK and India are very close to a significant trade deal because they have begun negotiations on agriculture. Agriculture is always the last item to be negotiated because it is so critical in each country. Everything else must be pretty much finished.
Note that major trade deals like this take years to complete, with hundreds of interested parties on both sides providing input, so that both sides gain more than they lose. Which is why all such deals are win-win.
Sadly, Trump isn’t interested in win-win; nor is he patient enough to negotiate for years; he is more interested in quick, headline grabbing “deals” that boost his ego, but not our economy.
– We already know that electricity rates will soar next year.
> That’s because our electricity grid is toast, and incapable of producing what we require without shutting it all down. That’s also because we keep putting more and more pressure on the grid, by asking us to use more and more of what we can no longer produce and deliver already. We already know wind and solar are just expensive projects with big profits to those tied into it. It’s not the answer by any stretch of anyone’s imagination, just yet anyway. We can’t even build the products needed to do so, even if it did work, but it doesn’t. It’s a lost cause now, but maybe down the road sometime, and someplace, we will develop what it will take, and it’s not those Two!!
– If the fed starts cutting rates, housing prices may explode again. > You require lots of money to but a home. Interest rates have very little to do with it. If you’re stretching to make payments on. 3% mortgage, you have no shot at an 8% one. You also need lots of money for maintenance and insurance etc. those rates are going up and up, so they are in essence replacing the cost saved by lower interest rates. Not affordable for most right now, and I don’t care what the rates are. It’s not the cost of the home, but rather the cost of having a home. There is the rub…
– deporting all the cheap construction labor, home maintenance will skyrocket as well – carpenters, plumbers, electricians, etc will all command premium pay. > I have dealt with some of that cheap labor from Brazil and Mexico from contractors I have used. Most jobs required rework, and/or redone all together. I had 2 jobs that required both!! Just an FYI that “Trade Jobs” have already skyrocketed and are not coming down, and those are the Legal Tradesman I’m talking about.
So the Fed has is happy watching the supply of money increase over the last 12-15 months and will cut rates even though inflation has not been tamed while we have an unemployment rate less than 4.4 (historically quite low). Well don’t be shocked if that causes the curve to steepen by more than the rate cut. Actually that makes sense. If the Fed is going to encourage the increase in money supply and at the same time cut rates then it isn’t interested in controlling inflation. Actually I would argue the Fed is really just trying to maintain an elevated level of inflation. So, why would any rational bond investor buy anything longer than 2 years in this mess?
droopy don had a stroke at the Putin meeting–that’s why they panicked and left early
notice the very public dissing of Don by China, Russia, India and Israel after that day
he had another one this morning
droopier still
semi-concious at 9/11 ceremony
AI videos to cover now
This is absolutely the dumbest timeline. Never thought I’d see the day where a half-sentient version of the guy from Home Alone 2 and a cabal of pedophiles destroys the world’s strongest economy for a giggle. Actually, I never thought that would be a day period.
Just another manifestation of The Bullshit Age.
The photos and videos of Trump from the 9/11 memorial are shocking. I’m sure Mish will cover this like he did Hillary Clinton’s supposed degenerative brain disease before the 2016 election. Odd how she keeps ticking all these years later.
If Biden has showed up slurring his speech with a drooping face the right wing and media would have had a field day. Now? Crickets.
Aldi remains steadfast in pricing, but I notice chicken is spiking as people all have to eat only chicken these days to eat more than four nights a week.
I know this is about inflation not nutrition, but here’s a quick one…
https://m.youtube.com/shorts/-91sAG6fODc
Basic grocery basics prices through Walmart+ have held steady. Milk at Costco has jumped from $2.64 to $3.19 (maybe a seasonal adjustment). Prices at our local grocery store have jumped up so we’re only buying on sale items – mostly fresh chicken breasts and fresh salmon. Gas has jumped this week to $3.04 from $2.95.
Red meat lower than last year. Chicken slightly lower. Milk slightly lower. Eggs significantly lower. Coffee much higher. Seasonal fruits the same. That’s from Chicago north burbs.
Thank you.
Looks great, until you expand the chart out to 5 years: https://tradingeconomics.com/commodity/beef
Grocery prices have certainly been volatile lately. Beef has been consistently high, but chicken was down except for breasts.
August Food CPI
Aldi – nope
Walmart – yes
You’ll know it’s bad when the squirrels start disappearing.
Powell and the rest of the Feral Reserve need to go grocery shopping every week to see how much inflation really is taking place on the most essential consumer needs. My local grocery store put items on “sale” with a “regular” price listed that was above the previous regular price. There is a LOT ( >10%) of inflation that will show up on stats once the “sales” are over. I’m loading up on dry goods that are on sale.
What is crazy, wheat and corn are down over 60% to 70% since 2013. They also have dropped 30% to 40$ over the past 3 years. But oddly, groceries do no reflect those price drops.
This is illegal under FTC regulations. You can file a complaint with them. For more immediate potential action on the situation, you can contact your state Attorneys General office.
There is much info on the FTC website. And here is an article worth reading:
Gasoline is still flat and that I think is the only thing the government really watches when it comes to determining true inflation. It is public, it invades everything, and while the saudis do a lot of manipulation, there is just nothing better as an inflation indicator.
Flat is relative.
https://gasprices.aaa.com/?state=WA
Brought to you by The Liberals of Seattle.
Wow it’s almost like we could get rid of this issue by building a real power grid and having EV or, God forgive me for saying it, biodiesel trucks.
Gas is an artificially inflated resource.
The wrong people would make money off that.
Since the Donald came in, pump prices have been flat. Reminding the Saudis who will extricate them when their immensely poor population removes them Im sure had something to do with elevated Saudi pumping.
Big Donut is keeping prices down to hook people.