Overview

• August CPI data show grocery prices up 0.6% from July and 2.7% year over year, with sharp category spikes such as coffee up 3.6% month over month and roughly 21% over the year and beef up 2.7% on the month and about 14% on the year.
• Economists and food companies tie the acceleration to tariffs, immigration enforcement–driven labor shortages and climate disruptions, noting Brazilian coffee now faces a 50% levy and many Mexican tomatoes face a 17% tariff after a pact expired.
• Yale’s Budget Lab estimates current tariffs would lift food prices 3.4% in the near term and keep them about 2.5% higher over the long run, with the average effective U.S. tariff rate at its highest since 1935.
• The White House argues one month of data does not establish a trend and says trade deals will add tariff exceptions for staples like coffee and bananas, even as heavily imported foods post some of the largest increases.
• Retailers report shoppers trading down to private labels, using more coupons and making smaller, more frequent trips, with Kroger restoring paper coupons as AP/NORC polling finds grocery costs are a major stressor for more than half of Americans.