Inflation Rates Decline, Yet Americans Still Burdened by High Grocery Costs

As Thanksgiving comes and goes, new data shows a mixed picture for American households: the cost of cooking a traditional holiday meal is down for the third straight year, but millions of families say their day-to-day grocery bills still feel unmanageable. The disconnect highlights a broader trend, inflation may be cooling on paper, but affordability remains a major pressure point across the country.

According to the American Farm Bureau Federation, the average cost of preparing a classic Thanksgiving dinner is about 5% cheaper than last year, a rare bright spot for holiday hosts.

The headline driver behind the decrease is turkey prices, which plunged roughly 16%, pulling the overall cost of the meal down. However, not everything on the table followed this downward trend. The Farm Bureau’s data showed significant price increases in several holiday staples: fresh vegetable trays surged more than 61%, sweet potatoes jumped 37%, and frozen peas increased 17.2%. Only a few items saw price drops, including 14-ounce packages of cubed stuffing mix, which decreased by 9%.

Natural disasters and supply-chain volatility are key factors behind these uneven price changes, according to agricultural economists. North Carolina, which produces nearly 60% of the nation’s sweet potatoes, suffered major hurricane damage last year, significantly tightening supply and driving prices upward. The produce sector has been particularly vulnerable to weather-related disruptions and labor shortages that continue to plague agricultural production nationwide.

Looking beyond the Thanksgiving table, a new analysis from CBS News reveals that millions of Americans still feel financially squeezed, even though inflation has fallen substantially from its pandemic-era peak of over 9% in 2022. This persistent affordability crisis stems from a combination of long-standing structural problems and newer economic pressures.

Housing shortages continue to drive up both rental and purchase prices in metropolitan areas across the country. Meanwhile, child-care costs have increased at rates outpacing general inflation, with the average American family now spending between 10-20% of their household income on childcare expenses. Healthcare costs continue their upward trajectory, with prescription drug prices seeing particularly steep increases.

Rising utility bills have also contributed to household budget strain. Electricity rates in several regions have jumped between 10-15% compared to pre-pandemic levels, according to energy market analysts. Additionally, what CBS describes as “steep new U.S. tariffs” have pushed prices higher in certain consumer goods sectors.

The cumulative effect creates a significant disconnect between official inflation statistics and everyday financial reality for many Americans. While current grocery inflation runs at just 2.7% year-over-year, CBS News’ price tracker shows food costs overall remain 18% higher than they were in January 2022.

This persistent elevation in prices explains why nearly half of Americans report that groceries are harder to afford today than a year ago, according to a recent Axios/Harris Poll. Economic analysts point out that consumers aren’t comparing current prices to last month’s figures; they’re comparing them to what they paid before the pandemic-era inflation spike.

The consequences of this affordability gap are increasingly visible in food insecurity statistics. This year, 14% of U.S. households have experienced food insecurity, according to Purdue University’s Food Demand Analysis Center. The situation is even more dire in high-cost urban areas. In New York City, approximately 40% of families report being unable to afford their weekly food costs, according to joint research from Robin Hood and Columbia University.

These statistics underscore a fundamental economic reality: even as headline inflation numbers improve, the accumulated price increases of the past three years continue to strain household budgets. For many Americans, the slight moderation in turkey prices this Thanksgiving offers little relief from the broader affordability challenges they face throughout the year.