Grocery Inflation Cools, but Eating Out Stays Hot

Food prices in the United States have cooled. In September, overall food prices were unchanged from the month before and 2.5% higher than a year earlier, according to the Consumer Price Index released by the Bureau of Labor Statistics on October 14. That compares with 3.7% annual inflation for all consumer prices, making food relatively calm in September.

Grocery prices cooled the most. Food at home fell 0.1% in September and was 1.8% higher than a year earlier, down from 2.2% in August. Eating out moved the other way. Food away from home rose 0.2% in September and 3.5% over the year, nearly double the grocery rate.

The grocery aisle is split. Compared with a year earlier, eggs fell 20.6%, butter fell 10.3%, cheese fell 3.0% and bacon fell 3.3%. Candy and gum rose 7.7%, coffee rose 7.1%, fish and seafood rose 6.9% and uncooked ground beef rose 5.4%. Over the month, beef and veal prices fell 1.3%, while fresh fruit rose 2.0% and eggs rose 1.0%.

The U.S. Department of Agriculture’s Economic Research Service forecast in October that all food prices will rise 2.8% for the full year 2026. Groceries are forecast to rise 2.3% and eating out 3.5%. Beef and veal are expected to rise 8.7% for the year. For 2027, the forecast puts all food inflation lower, at 1.7%.

A cooler inflation rate does not mean prices have come back down. By the Bureau of Labor Statistics index, grocery prices are about 31.8% higher than in February 2020. What drove September’s overall inflation was not food but gasoline, which jumped 9.1% in the month. The next Consumer Price Index release is November 10.