Journal Article

Tight Labor Markets Have Been a Key Contributor to High Food Inflation

Abstract: Food inflation remains higher than measures of overall inflation, and labor markets have been tight. We find that processed food products have driven recent increases in grocery prices, and we argue that labor market tightness affects the prices of these labor-intensive products in particular through increases in production and distribution costs. Food inflation at grocery stores could remain elevated if price pressures on the supply side persist and demand for food at home remains strong.

Keywords: food prices; labor markets; inflation;

JEL Classification: E2; E31; L66;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2023-04-19

Pages: 4