How pricey was your July 4^th BBQ this year? The American Farm Bureau Federation reports that the average cookout cost for a party of 10 reached a new high this year of $71.22, up 5% from last year and 30% from 2020. It also depends on where you live. On the West Coast, your barbecue will cost a whopping $80.88.

The meat in this traditional meal made up half the cost. Ground beef costs 11% more than last year, and pork chops are 8% pricier. Only chicken was 4% cheaper. It was a different story in 2022 when food inflation peaked. The organization reported a 17% total cost spike that year, and chicken breast shot up 33% amid bird flu. This year, lemonade took the biggest hit due to a decline in lemon production and higher sugar prices. That delicious summertime beverage will cost you 12% more than last year.

Why Inflation Numbers Don't Include Food Costs

In 2021, inflation was much higher than in prior years. From 2012 to 2020, it varied from 0.7% to 2.3%. In 2021, it had skyrocketed to 7%. By 2022, it declined to 6.5%. In 2023, it was down to 3.4%. Keep in mind the Federal Reserve's target is 2%. The Consumer Price Index (CPI), which considers specific household goods and services categories, is widely used to measure inflation. However, due to their volatility, core inflation calculations do not include food or energy. While it makes sense in one regard, these separate measurements can explain the "disconnect" between seemingly lower inflation and consumers' perceptions.

What It All Means

It is this perception of consumers that drives the broader economy. People are likelier to notice a rise in daily costs, such as at the grocery store and the gas pump. This personal experience of inflation may cause them to curb discretionary spending, whether eating at a restaurant or going to a movie or concert. They may put off more expensive purchases like a new car or a home remodeling. And this changing behavior inevitably has a knock-on effect. Fortunately, as core inflation continues to decline, that should take some pressure off consumer food and energy costs.