Get ready for grocery prices to get even more painful
Rising diesel and energy costs, driven by geopolitical instability in the Middle East, are expected to increase grocery prices for U.S. consumers. Major food companies are reporting higher freight and production costs, signaling that recent inflation relief may be temporary.
Why it matters
Increased transportation and energy costs directly impact household budgets, threatening to reverse recent progress in stabilizing food inflation.
Rising diesel prices are making it more expensive to produce and distribute groceries for US households. Michael M. Santiago/Getty Images Attacks on Middle East tankers and oil infrastructure are causing diesel prices to soar. Higher fuel prices have a significant impact on the cost of transporting food. Households got some relief from tariffs this year, but the Iran conflict is adding new price pressure. Grocery bills had begun to stabilize after a bruising stretch of inflation. Now, rising fuel and transportation costs threaten to make that relief short-lived. While food prices have managed to hold fairly steady this year, much of September's accelerating headline inflation number was driven by a 20.4% increase in energy prices — the largest hike since May, the US Bureau of Labor Statistics said Wednesday.
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