Food prices, inflation expectations, and consumer sentiment

Food prices are among the most visible indicators of inflation, playing an important role in shaping how Americans perceive the economy. This study examines the relationship between food prices, inflation expectations, and consumer sentiment. Using monthly data from 1982 to 2024, we show that food‐away‐from‐home prices trigger sharper but short‐lived responses in inflation expectations, while food‐at‐home prices have more persistent effects. Inflation expectations in the 0–2 percent range are linked to higher consumer sentiment, suggesting that stable food prices can help anchor confidence. The findings underscore the importance of disaggregating the food price components of inflation for understanding how consumers form expectations and how those expectations shape confidence.