Whether the economy is strong or weak, we all have to eat.
Just as bread, milk, and eggs are common staples on a grocery list, the buying and selling of food is a staple for any economy. In fact, at just under 10 percent of the average American’s total expenditures, food plays a significant economic role for all of us. Food prices are one of the major categories tracked in the U.S. Consumer Price Index because they offer an accurate snapshot of what’s going on in the economy. For instance, food prices are based predictably on farm-level commodity prices, but they also reflect other competitive economic factors such as packaging, processing, transportation, and marketing costs.
One of the largest grocery store chains in the country—Albertsons—is headquartered in Idaho. The first Albertsons store opened in Boise in 1939, bringing in revenue of $170,000 and a profit of almost $10,000 over its first year of operation. Since then, Albertsons has grown to become the second largest food and drug retailer in the United States, behind only Kroger. Currently, Albertsons operates more than 2,200 stores across 33 states and the District of Columbia. Along with other grocery stores, Albertsons provides goods, jobs, and community services that boost local economies.
Outside of grocery stores, food is also an economic driver in farmers’ markets and home-based baking and canning businesses throughout the state. Recently, a bill that would have created a state law governing “cottage” foods was overturned; cottage food producers can now sell certain foods from home kitchens directly to consumers. Previously, there was no law legalizing cottage food home businesses. To curb concern, the approved list of food items poses very low risk for foodborne illness. It includes items such as baked goods, jams, dry herbs and seasonings, breads, and dried fruits. For an entrepreneurial state like Idaho, these represent great opportunities for home-based businesses. This small-scale business model is thriving, enabling many people to share their gardening and cooking talents.
Idaho’s food industry continues to flourish even though prices fluctuate as expected with commodity costs, major weather events, and shocks to global food markets. The economics of groceries are much more complex than it seems on the surface, but each dollar we spend supports food variety, local communities, and jobs for residents.
Housing Market. In December, the CoreLogic® Home Price Index (HPI) for Idaho, which measures home price appreciation, experienced a year-over-year increase of 8.6%. Nationally, the HPI increased 6.3% during the same period.
Idaho Job Report. Idaho’s unemployment rate remained unchanged at 3.9% in December, and the national unemployment rate also remained at 5.0% in December.
Inflation. The U.S. Consumer Price Index decreased 0.3% from November to December. Year over year, the index increased 0.7%, which is below the Federal Reserve’s target annual inflation pace of 2%.
Consumer Confidence. The U.S. Consumer Confidence Index® increased 1.8 points to 98.1 in January. The Present Situation Index remained unchanged at 116.4, and the Expectations Index increased 2.9 points to 85.9.