• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Canada
  • United Kingdom
  • Subscribe
  • facebook
  • instagram
  • RSS
  • RSMUS.com

The Real Economy Blog

Search

  • Economics
  • Technology
  • Consumer
  • Industrials
  • Finance
  • Real Estate
  • Health Care
  • Life Sciences
Home > Economics > CHART OF THE DAY: The rising cost of eating at home and the lower cost of driving

CHART OF THE DAY: The rising cost of eating at home and the lower cost of driving

Feb. 10, 2021 by Joseph Brusuelas

  • email
  • Twitter
  • Facebook
  • Linkedin

The overall cost of living remains subdued, with the Consumer Price Index rising 1.4% in January. Over the past six months, the headline inflation rate has remained muted and stands below the Federal Reserve’s 2% implicit target necessary for increased demand and sustainable growth. With an economy still operating at 20% capacity and 9.8 million jobs short of pre-pandemic levels, inflation risks to the overall outlook in the near- to medium-term inflation remain modest.

We expect year-ago base effects linked to movements in the price per barrel of oil to drive topline CPI higher by mid-year and then ease into the end of the year. Thus we expect the top-line metric to temporarily move toward 3.1% by late summer. The Federal Reserve will recognize this for the transitory effect that it is and will not move from its current policy path with respect to zero interest rates or its $120 billion in monthly asset purchases.

For households, the pandemic has resulted in higher prices for home-cooked meals and lower gas prices on account of driving nowhere. The cost of food at home in 2019 rose by an average of 0.9%, compared with 3.7% in January. The cost of motor fuel in 2019 decreased by an average of 3.5%, compared with January’s 8.7% decrease.

We anticipate at-home food prices to continue to revert toward their 2% pre-pandemic average increases as vaccinations rise and the weather grows warmer, presenting households with more dining options. The increase in gasoline inventories as reported by the Department of Energy suggests near-term moderation in gasoline prices, balanced against decreased inventories of crude oil in the medium term.

For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

  • email
  • Twitter
  • Facebook
  • Linkedin

Related posts

  • Medical cost ratio is a growing concern among health insurers

    Among the worrisome trends discussed on health insurers' recent earnings calls is a growing medical cost ratio, or MCR, the percent of premium the insurer spends on claims and expenses that improves health care quality. It is sometimes…

  • brexitindex_6282019
    The RSM Brexit Stress Index: Lower highs and lower lows

    The RSM Brexit Stress Index closed slightly higher this week, as political talk centers on whether Boris Johnson, the Conservative Party front runner favored to take over as U.K. Prime Minister, can make good on his promise of…

  • CHART OF THE DAY: Existing home sales surge

    Existing home sales surged in July by the most on record, increasing 24.7% from June to a 5.86 million annualized rate. The housing market has been booming as a result of low mortgage rates, which have been hovering…

Filed Under: Economics Tagged With: food, gasoline, inflation, Joe Brusuelas, oil

About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

Primary Sidebar

Other Regions

  • Canada
  • United Kingdom

Categories

  • Economics
  • Technology
  • Consumer Products
  • Industrials
  • Financial Services
  • Real Estate
  • Health Care
  • Life Sciences

Recent Economics articles

  • Powell statement: Market challenging Fed’s credibility on inflation targeting Mar. 4, 2021
  • 5 things to know in life sciences: Week of March 1 Mar. 4, 2021
  • C-PACE: Government push toward greener buildings may fuel financing demand Mar. 3, 2021

RSMUS.com links

The Real Economy

Middle Market Business Index

MMBI Special Reports

Footer

  • Facebook
  • Instagram
  • RSS

About The Real Economy Blog

The Real Economy Blog from RSM US LLP was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

© 2021 RSMUS.com | Privacy Policy | Cookie Policy

The Real Economy Blog
  • Economics
  • Technology
  • Consumer
  • Industrials
  • Finance
  • Real Estate
  • Health Care
  • Life Sciences