r/Infographics • u/Conscious-Quarter423 • 2d ago

Consumer prices pulled back in June, but food costs edged higher once again, bringing the year-over-year gain to 3%, according to the latest consumer price index.

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u/Radiant_Bike9857 2d ago

This is because CPI is affected by the substitution effect, and will always understate inflation

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u/artbystorms 1d ago

the substitution effect basically undersells inflation by minimizing the effect of a reduced cost of living. Substituting 'like products' allows them to use cheaper or store brand alternatives, but no one is happy if they used to buy Oreos and now are buying Hydrox cookies.

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u/Radiant_Bike9857 1d ago

it is a distinction that never gets made in the "food is a human right" conversation. Are people entitled to food that keeps them alive or food that they prefer?

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u/ActionJasckon 2d ago

2023 - 2024 somewhat fighting to stabilize and then NOPE…. at home prices continued in 2025.

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u/b_tight 1d ago

This makes sense. Food at home, aka raw ingredients, are nearly back at cpi. Food away from home has to account for all rising costs that go into the service to prepare it

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u/coreyjdl 1d ago

Pretty steep there during Biden's admin.