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    Harris’s Price-Gouging Ban: Price Controls or No Quick Effect?

    The plan does not appear to amount to government price controls. It also might not bring down grocery bills anytime soon.Vice President Kamala Harris threw her support behind a federal ban on price-gouging in the food and grocery industries last week. It was the first official economic policy proposal of her presidential campaign, and it was pitched as a direct response to the high price of putting food on the table in America today.“To combat high grocery costs, VP Harris to call for first-ever federal ban on corporate price-gouging,” the Harris campaign proclaimed in the subject line of a news release last week, ahead of a speech laying out the first planks of her economic agenda.It is still impossible to say, from publicly available details, what exactly the ban would do. Republicans have denounced the proposal as “communist,” warning that it would lead to the federal government setting prices in the marketplace. Former President Donald J. Trump has mocked the plan on social media as “SOVIET Style Price Controls.”Progressives have cheered the announcement as a crucial check on corporate greed, saying it could immediately benefit shoppers who have been stunned by a 20 percent rise in food costs since President Biden took office.But people familiar with Ms. Harris’s thinking on the ban now say it might not resemble either of those characterizations. The ban, they also suggest, might actually not do anything to bring down grocery prices right now. Those who spoke about the strategy behind the emerging policy did so on the condition of anonymity.Ms. Harris’s campaign has created the space for multiple interpretations, by declining to specify how that ban would work, when it would apply or what behaviors it would prohibit.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How Food Prices Have Changed During the Biden Administration

    Grocery prices are no longer rising as rapidly, but food inflation remains a top issue for voters, polls show.A central issue has plagued the Biden administration for most of its term: the steep rise in grocery prices.Polls have consistently found that inflation remains a top concern for voters, who have seen their budgets squeezed. A YouGov poll published last month found that 64 percent of Americans said inflation was a “very serious problem.” And when it comes to inflation, several surveys suggested that Americans were most concerned about grocery prices.Despite the gloom about grocery costs, food price increases have generally been cooling for months. On Wednesday, new data on inflation for July will show if the trend has continued.Economists in a Bloomberg survey think that inflation overall probably climbed by 3 percent from a year earlier, in line with a 3 percent rise in June. That sort of reading would probably keep officials at the Federal Reserve on track to cut interest rates in September. Investors, who were recently rattled by signs of an economic slowdown, have looked to rate cuts as a support for markets.Some voters have blamed President Biden for rising prices, pointing out that food costs have soared over the past four years. Former President Donald J. Trump, when accepting the Republican nomination last month, highlighted grocery costs and said that he would “make America affordable again.”In the year through June, grocery prices rose 1.1 percent, a significant slowdown from a recent peak of 13.5 percent in August 2022. Many consumers might not be feeling relief, though, because food prices overall have not fallen but have continued to increase, albeit at a slower rate. Compared with four years ago, grocery prices are up about 20 percent.

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    Annual change in grocery prices for U.S. consumers
    Year-over-year change in average for “food at home” index, not seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Reduflación: qué pasa cuando los comestibles pesan menos y cuestan igual

    Los compradores de comestibles están notando algo raro. Bolsas de papas fritas llenas de aire. Latas de sopa que se han encogido. Paquetes de detergente más pequeños.Las empresas están reduciendo el tamaño de sus productos sin reducir los precios, y los comentarios de los consumidores, desde Reddit a TikTok, pasando por la sección de comentarios de The New York Times, rebosan indignación por esta tendencia, conocida como reduflación (shrinkflation en inglés).La práctica no es nueva. Los vendedores llevan siglos reduciendo discretamente los productos para evitar subir los precios, y los expertos creen que ha sido una obvia estrategia corporativa al menos desde 1988, cuando la marca Chock Full o’Nuts redujo su bote de café de 455 gramos a 368 gramos y sus competidores siguieron el ejemplo.Pero la indignación hoy es más pronunciada. El presidente Joe Biden se hizo eco del enojo en un video reciente. (“Lo que más rabia me da es que los envases de helado han disminuido de tamaño, pero no de precio”, lamentó). Las propias empresas explotan esta práctica con trucos publicitarios. Una cadena canadiense presentó una pizza growflation . (“En términos de pizza”, bromeaba el comunicado de prensa de la empresa, “una tajada más grande”).Pero, ¿cómo funciona la reduflación desde el punto de vista económico? ¿Sucede con más frecuencia en Estados Unidos y, si es así, significa que los datos oficiales no reflejan el verdadero alcance de la inflación? A continuación te explicamos la tendencia y lo que significa para tu bolsillo.La reduflación fue galopante en 2016Puede resultar difícil de creer, pero la reduflación parece estar ocurriendo con menos frecuencia hoy que hace unos años.Los mayores efectos de la reduflaciónCuando los productos encogen, aumentan la inflación. Estos bienes experimentaron el mayor aumento de precios por la reduflación.

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    Variación de precios de enero de 2019 a octubre de 2023
    Fuente: Oficina de Estadísticas Laborales de EE. UU.Por The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Shrinkflation 101: The Economics of Smaller Groceries

    Grocery store shoppers are noticing something amiss. Air-filled bags of chips. Shrunken soup cans. Diminished detergent packages.Companies are downsizing products without downsizing prices, and consumer posts from Reddit to TikTok to the New York Times comments section drip with indignation at the trend, widely known as “shrinkflation.”The practice isn’t new. Sellers have been quietly shrinking products to avoid raising prices for centuries, and experts think it has been an obvious corporate strategy since at least 1988, when Chock Full o’Nuts cut its one-pound coffee canister to 13 ounces and its competitors followed suit.But outrage today is acute. President Biden tapped into the angst in a recent video. (“What makes me the most angry is that ice cream cartons have actually shrunk in size, but not in price,” he lamented.) Companies themselves are blasting the practice in marketing gimmicks. One Canadian chain unveiled a growflation pizza. (“In pizza terms,” the company’s news release quipped, “a larger slice of the pie.”)But how does shrinkflation work, economically? Is it happening more often in the United States, and if so, does that mean official data are failing to capture the true extent of inflation? Below is an explainer of the trend — and what it means for your wallet.Shrinkflation was rampant in 2016.It might be hard to believe, but shrinkflation appears to be happening less often today than it was a few years ago.The Biggest Shrinkflation EffectsWhen products shrink, it adds to inflation. These goods saw the biggest bump to their price increases from “shrinkflation.”

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    Change in price from January 2019 to October 2023
    Source: Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    An Emboldened F.T.C. Bolsters Biden’s Efforts to Address Inflation

    With few unilateral options and little hope of legislation from Congress, the president’s early investment in competition policy could pay a political dividend.An independent federal agency has become one of the most reliable executors of President Biden’s attempts to fight inflation, at a time when the White House has few weapons of its own to quickly bring down stubbornly high prices of consumer staples like groceries.The Federal Trade Commission filed a lawsuit on Monday, joined by several state attorneys general, to challenge a merger between the supermarket giants Kroger and Albertsons. The agency’s rationale in many ways echoed Mr. Biden’s renewed attempts to blame corporate greed for rising prices and shrinking portions in grocery aisles.“If allowed, this merger would substantially lessen competition, likely resulting in Americans paying millions of dollars more for food and other essential household goods,” agency officials wrote in a legal complaint. Because grocery prices have risen significantly in recent years, they added, “the stakes for Americans are exceptionally high.”That is true for consumers, and it is true for the president. More Americans disapprove of his handling of the economy than approve of it. Consumer confidence, while improved in recent months, remains relatively weak for an economy with low unemployment and solid growth like the one Mr. Biden is presiding over.An internal analysis by White House economists suggests that no single factor is weighing more on consumer sentiment than grocery prices. Those costs soared in 2022 and have not fallen, though their rate of increase has slowed.White House officials concede that there is little more Mr. Biden can do unilaterally to reduce grocery prices and even less chance of legislative help from Congress. That is why Mr. Biden has resorted to the bully pulpit, calling on stores to reduce prices and chastising snack makers for engaging in “shrinkflation” — reducing portions while raising or maintaining prices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Will Food Prices Stop Rising Quickly? Many Companies Say Yes.

    Food companies are talking about smaller price increases this year, good news for grocery shoppers, restaurant diners and the White House.Few prices are as visible to Americans as the ones they encounter at the grocery store or drive-through window, which is why two years of rapid food inflation have been a major drag for U.S. households and the Biden administration.Shoppers have only slowly regained confidence in the state of the economy as they pay more to fill up their carts, and President Biden has made a habit of shaming food companies — even filming a Super Bowl Sunday video criticizing snack producers for their “rip off” prices.But now, the trend in grocery and restaurant inflation appears to be on the cusp of changing.After months of rapid increase, the cost of food at home climbed at a notably slower clip in January. And from packaged food providers to restaurant chains, companies across the food business are reporting that they are no longer raising prices as steeply. In some cases that’s because consumers are finally pushing back against price increases after years of spending through them. In others, it’s because the prices that companies pay for inputs like packaging and labor are no longer rising as sharply.

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    Year-over-year change in consumer price indexes
    Source: Bureau of Labor StatisticsBy The New York TimesEven if food inflation cools, it does not mean that your grocery bill or restaurant check will get smaller: It just means it will stop climbing so quickly. Most companies are planning smaller price increases rather than outright price cuts. Still, when it comes to the question of whether rapid jumps in grocery and restaurant prices are behind us, what executives are telling investors offer some reason for hope.Some, but not all, consumers are saying no.Executives have found in recent months that they can raise prices only so high before consumers cut back.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Takes Aim at Grocery Chains Over Food Prices

    President Biden has begun to accuse stores of overcharging shoppers, as food costs remain a burden for consumers and a political problem for the president.President Biden, whose approval rating has suffered amid high inflation, is beginning to pressure large grocery chains to slash food prices for American consumers, accusing the stores of reaping excess profits and ripping off shoppers.“There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” Mr. Biden said last week in South Carolina. Aides say those comments are a preview of more pressure to come against grocery chains and other companies that are maintaining higher-than-usual profit margins after a period of rapid price growth.Mr. Biden’s public offensive reflects the political reality that, while inflation is moderating, voters are angry about how much they are paying at the grocery store and that is weighing on Mr. Biden’s approval rating ahead of the 2024 election.Economic research suggests the cost of eggs, milk and other staples — which consumers buy far more frequently than big-ticket items like furniture or electronics — play an outsized role in shaping Americans’ views of inflation. Those prices jumped by more than 11 percent in 2022 and by 5 percent last year, amid a post-pandemic inflation surge that was the nation’s fastest burst of price increases in four decades.The rate of increase is slowing rapidly: In December, prices for food consumed at home were up by just over 1 percent, according to the Labor Department. But administration officials say Mr. Biden is keenly aware that prices remain too elevated for many families, even as key items, like gasoline and household furnishings, are now cheaper than they were at their post-pandemic peak.And yet, there is a general belief across administration officials and their allies that there is little else Mr. Biden could do unilaterally to force grocery prices down quickly.Grocery store margins are rising

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    Operating profit margin by type of retailer
    Notes: Operating margin defined as sales, receipts and operating revenue as a share of operating expenses. Data shown as four-quarter rolling average.Source: Council of Economic AdvisersBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Prices for Some Goods Are Actually Falling This Holiday Season

    As inflation slows, prices for some physical goods are falling outright, which could lift consumers’ spirits.American shoppers, burned by more than two years of rapid inflation, are getting some welcome relief this holiday season: Prices on many products are falling.Toys are almost 3 percent cheaper this Christmas than last, government data shows. Sports equipment is down nearly 2 percent. Bigger-ticket items are also showing price declines: Washing machines cost 12 percent less than a year ago, for example. And eggs, whose meteoric rise in prices last winter became a prime example of the country’s inflation problem, are down 22 percent over the past year.Consumer prices, in the aggregate, are still rising, though not nearly as quickly as a year ago. Most groceries still cost more than they did a year ago. So do most services, such as restaurant meals, haircuts and trips to the dentist. And housing costs, the biggest monthly expense for most Americans, are still rising for both renters and home buyers. Overall, the price of physical goods is flat over the past year, while the price of services is up a bit more than 5 percent.Still, economists view the moderation in goods prices as an important step toward putting the high inflation of the past two and a half years more firmly in the rearview mirror. They expect it to continue: Most forecasters say prices for physical products will keep falling next year, especially prices for longer-lasting manufactured goods, where the recent declines have been largest. That should help price increases overall to ease.“We’re just kind of in the beginning of that phase, and we should continue to see downward pressure on prices in this category,” said Michelle Meyer, chief economist for Mastercard.For consumers, who have been dour about the economy despite low unemployment, falling prices on many goods could provide a psychological lift. After the rapid inflation of the past few years, a mere slowdown in price increases might not feel like much to celebrate. But seeing prices fall could be a different story — especially because some of the biggest recent declines have been in categories that consumers tend to pay the most attention to, such as gasoline. (The price of regular gas, which topped $5 a gallon nationally in June 2022, has fallen to just over $3 on average, according to AAA.)Most groceries still cost more than they did a year ago. Maansi Srivastava/The New York Times“People will key in on certain prices,” said Neale Mahoney, a Stanford University economist who recently left a role in the Biden administration. “We know that people will overweight certain things.”The price of many goods soared in 2021, fed by a surge in demand from consumers flush with pandemic relief checks and by supply chain disruptions that limited supplies of many products, especially those from overseas.Many economists initially expected a quick reversal, but instead prices kept rising. Supply chains took longer to return to normal than expected, and Russia’s invasion of Ukraine led to a spike in energy prices in 2022. At the same time, consumer demand for goods remained high, and many companies took advantage of the opportunity to push through price increases and pad their profit margins.Now, however, many of those forces are beginning to fade. Supply chains have largely returned to normal. Oil prices have fallen. Economic weakness in China and other countries has held down demand for many raw materials, which feeds through to consumer prices.Softer demand from American consumers could also be playing a role. The Federal Reserve has raised interest rates repeatedly since early last year in an effort to curb spending and control inflation. Consumers have so far proved remarkably resilient, but retailers in recent months have reported that shoppers have increasingly traded down to cheaper items or waited for sales before buying — trends that could accelerate if the economy cools further next year.“We think that the consumer is going to be looking for value, and that’s because they are very sensitive to price,” Carlos E. Alberini, chief executive of Guess, the fashion retailer, told investors last month. The company has “revisited some of the pricing structure we have in all brands,” he added.The price of services is up a bit more than 5 percent for such things as restaurant meals, haircuts and trips to the dentist.Hiroko Masuike/The New York TimesSome toy manufacturers and retailers that sell toys have also said they expect sales this season to be less robust than in years past and have leaned into advertising their products’ affordability.At many companies, price cuts have taken the form of Black Friday sales and holiday promotions that are larger for some categories of items than in past years. At Signet Jewelers, the big diamond retailer, sales fell in the third quarter, and the company recently said that it expected sales to be lower this holiday season than last year in part because of “elevated promotional activity.”“It’s been a different holiday season,” Virginia C. Drosos, Signet’s chief executive, told investors on a conference call this month. Instead of shopping early, customers are waiting to make their purchases and are looking for deals, she said.Matt Pavich, senior director of innovation and strategy for Revionics, a company that uses artificial intelligence to help retailers set prices, said companies were trying to cut prices before their competitors do.“As prices come down, there’s going to be the race to bring prices down more, get the credit for that,” he said. “We’re going to see retailers really trying to win back consumers’ trust.”Still, prices for most products remain well above where they were before the pandemic. A dozen eggs cost about 50 cents more than in February 2020. Used car prices, another prominent example of pandemic sticker shock, have fallen more than 10 percent from their peak early last year but are 37 percent above where they were in February 2020.Services prices are still climbing more quickly than before the pandemic. Some economists say that goods prices will need to fall further for overall inflation to return to the Federal Reserve’s target of 2 percent a year.“We need pretty substantial deflation, and I wouldn’t call what we’re seeing ‘substantial,’” said Wendy Edelberg, director of the Hamilton Project, an economic policy division of the Brookings Institution. “It’s not even substantial in a historical context.”Indeed, prices of durable goods fell much of the two decades that preceded the pandemic. Long-term trends such as globalization and automation have tended to push down manufacturing costs. Intense competition among retailers, especially with the rise of online shopping, meant those savings were mostly passed on to consumers.Services prices, on the other hand, rarely fall, in part because wages account for a much larger share of the cost of most services. During the decade before the pandemic, services prices gradually rose while goods prices were flat or fell, resulting in an extended period of stable, moderate inflation.Economists don’t expect to see outright deflation, in which prices fall for both goods and services. That’s a good thing: Overall price declines are generally viewed as economically dangerous, if they last.“When demand in the economy is weak, the last thing you want is someone to say, ‘I’m not going to buy that car today because it’s going to be $600 less expensive in six months,’” said Karen Dynan, an economist at Harvard.Brittany Greeson for The New York TimesThere are a few reasons. For starters, in theory, deflation could prompt consumers to hold off on spending, touching off a downward spiral. People may be unlikely to buy today what they expect to be cheaper tomorrow. Once deflation takes hold, it can be difficult to escape: Japan has been stuck in a deflationary pattern since the late 1990s.“When demand in the economy is weak, the last thing you want is someone to say, ‘I’m not going to buy that car today because it’s going to be $600 less expensive in six months,’” said Karen Dynan, an economist at Harvard.For another, companies are unlikely to raise wages in a world where they cannot charge more. And if wages are not going up — or are even going down — it will be harder for households to keep up with fixed bills, like mortgage interest payments.But while broad-based price declines are a problem, most economists view the more limited declines happening now as a sign that the economy is gradually moving past the disruptions of the pandemic.“Supply chains have basically normalized,” said Neil Dutta, head of economic research at Renaissance Macro. “Household demand behavior has basically normalized, the dollar is still pretty strong. I wouldn’t see a reason why goods prices would go higher.” More