High food prices could keep Americans hating the economy for years to come

• High food prices are Americans' top concern about the economy, according to Morning Consult.
• While inflation has fallen in recent months, food prices are still higher than they used to be.

Americans continue to say they're unhappy with the state of the economy. But it's not high housing costs or low wage growth that they're most concerned about: it's food prices.

That's according to a Morning Consult poll of over 2,200 US adults conducted in November. Ninety percent of individuals said they were very or somewhat concerned about grocery and food prices, higher than any other factor surveyed. Seventy-one percent, in comparison, said they were concerned about their salary or wage growth.

In part, these concerns can be attributed to rising food prices over the last few years. In October 2020, the average four-person US household spent roughly $238 per week on food at home, Bloomberg reported. In October 2023, a similar survey showed this figure had risen to about $315.

In recent months, economists have puzzled over the apparent disconnect between how Americans say they feel about the economy — pretty bad — and the available economic data — which suggests things are going pretty well. This conversation matters because negative economic sentiment is shaping up to be one of President Joe Biden's key obstacles to reelection next fall.

High food prices could be a key reason for this disconnect, Aaron Terrazas, Glassdoor's chief economist, told Business Insider. While overall inflation has slowed over the past year, elevated food costs, which Americans encounter on an almost daily basis, haven't gone away.

"Economic policymakers focus on core inflation, which excludes commodities like food and gas," Terrazas said, "while regular people focus on the inflation rate of high-frequency purchases precisely like food and gas."

While gas prices have fallen recently, food costs have kept rising. Prices for food away from home — e.g. restaurant dining or food delivery — were up 5.4% in October compared to the same period last year, according to the Bureau of Labor Statistics. That's among the highest rates of inflation across the tracked categories, which also include energy, vehicles, and apparel, Business Insider previously reported.

If Americans are hoping for cheaper food prices to come next year, they're unlikely to get their wish. While some food costs could fall, prices on the whole are expected to rise an additional 3% in 2024, according to the US Department of Agriculture. While this is a lower growth rate than in recent years, it means that Americans will likely have to get used to paying more for food.

If food costs were to decline across the board, many shoppers might rejoice in the short term. But falling prices — or deflation — can be bad news for an economy and ultimately lead to a recession. It's among the reasons the Federal Reserve's target inflation rate is 2%, not below zero.

Americans' best hope is that their wages will grow — catching up to their food expenses — so that someday, their grocery bills sting a bit less. Over the past year, wages have risen faster than food prices, 4.1% vs. 3.3%, making some shoppers better equipped to handle higher costs. If this trend continues, Americans' concerns about their food budgets may eventually lessen, but it won't happen overnight. And it might not come soon enough for President Biden.

When McDonald's famous Big Mac burger debuted in 1967, it only cost $0.45, but the average American's annual income was only $5,200, per the Social Security Administration. Today, a Big Mac costs over $4, and the average income is roughly $60,000.

Indeed, rising food prices can be a normal economic phenomenon. If Americans have some time to get used to higher prices — and their pay starts catching up — maybe they'll become a little less worried about them.