This document discusses trends in food prices from 1995 to 2015 as measured by the food at home category of the Consumer Price Index (CPI). It found that the average annual expenditure on groceries increased from $148.42 in 1995 to $242.25 in 2015, a 63% rise. Food prices rose most sharply from 1995 to 2005, increasing 28% in that decade. More recently, inflation in the food category has been mild, with a slight dip in 2013 and a modest rise in 2014. The document also explores how human resources managers can use CPI data on cost of living to determine appropriate wages and salaries that reflect local economic conditions.

1. 1
Inflation and Analyses of Monetary Policies
ECO/561
Inflation and Analyses of Monetary Policies
To begin, the item decided for investigation or analysis from the
CPI market basket is a sub-class of the food category and is
known as food at home. It is comprised of things, for example,
grains, bread shop items, meats, poultry, angle, eggs, natural
products, vegetables drinks, sugars and desserts. This can also
be known as regular groceries that one would buy on a regular
weekly visit. This classification was picked due to its
pertinence, reasonableness and straightforwardness in surveying

2. its effect in connection with our assessed normal month-to-
month and yearly utilization at home. This food class makes up
what are named as unpredictable classifications and is barred
from the center buyer value record together with items found in
the vitality class. This unpredictability is pleasing in the
arrangement exhibited underneath for the period under survey
(Amadeo, 2018).
Annual number on groceries
The annual average for the item was $148.42 in 1995, ascending
to $189.8 in 2005, then achieving a much higher rate of $215.84
in 2010 lastly settling at $242.25 in the year 2015. The patterns
show an incremental ascent in the nourishments at home class
throughout the years under appraisal. From 1995 to 2015, there
was increase of $93.83 over the 20-year span. The biggest jump
in numbers was from 1995 to 2005 with an increase of $41.38
over the 10-year span. Utilizing, “1995 as the base year for
assessment, there is a 28% rate increment over the time of 1995
to 2005” (Amadeo, 2018). This is sharp increment as it means
family units needed to spend more keeping in mind the end goal
to buy things in the sustenance at home classification. The
“circumstance is even direr over the resulting time frames as it
ascends to 45 percent and 63 percent between the times of 1995
to 2010 and 1995 to 2015 separately” (Desjardins, 2018). This
expansion demonstrates that the costs of the things in this class
definitely expanded over that period implying that the acquiring
force of the normal family unit, ceteris paribus, radically
decreased as to the sustenance at home classification. The list
“expanded a rate of roughly 20% over the three time frames
from 1995 to 2015” (Desjardins, 2018).
The trends over the last 5 years
Beginning in 2012 of interest for this analysis are the
annual average figures contained within the on top of
tabulation, though the monthly figures are accustomed make a
case for the final annual average. It’s additionally necessary to
notice that “whereas inflation happen when prices rise compared
to the previous year, annual disinflation or deflation happens

3. when prices are slightly under their previous periods” (Amadeo,
2018). Though this seldom happens on an annual basis. Then in
2013, “the year started at 1.59% however fell to a low of 0.9%
and ultimately finished the year at 1.5%” (Desjardins, 2018).
The annual average is 1.47% that is less than the previous year.
Moving onto 2014, the first quarter had the highest rate, “which
is common for many years though monthly inflation usually
once into disinflation for the following months of July to
November finally sinking at an annual rate of 1.62%”
(Desjardins, 2018). This is often an increase from the previous
dip of .47 intimate in 2013.
CPI Statistics & Human Resources Manager
A human resources manager has to make many important
choices about the wages of employees of an organization. HR
departments handle the benefits, pay, and other compensation
offered to employees for their labor. One of the concepts
determined by the CPI is the cost of living in a certain area at
any given time. HR managers can use the cost of living data to
strategically calculate wages, base salaries for new hires, and
salary increases for existing employees. Those factors are a big
influence on the pricing of how grocery stores list the pricing of
their products due to the location and environment of the store.
As an HR manager, it is important to decide wages and salaries
for workers but also one factor to look at is the city and state
the store is in. This is a crucial factor in determining produce
pricing along with the current status of the produce in the
economy. Since the cost of living everywhere in the U.S is
different, wages, salaries, and prices will all vary depending on
the area.
Conclusion
Inflation can significantly decrease the buying power of the
dollar it gets too high. The United States government should
focus on monetary policies that drive down inflation in order to

4. maintain a positive quality of life for consumers and businesses
alike. Food prices, which seem to be directly linked with oil
prices, will inevitably continue to rise in the coming years due
to the various weather, environmental, and political economic
factors such as outsourcing our agriculture industry to Mexico
and Canada etc. The U.S is so diverse and the location of where
one-person lives is such a deciding factor on the pricing of
products and salary for wages. The number can vary so much
just because of the location; it can be really high or really low
in some places. As an economist, studying the CPI can greatly
increase your understanding of inflation.
Reference
Amadeo, K. (2018, August 15). 5 Reasons Why Food Prices
Keep Going Up. Retrieved from
https://www.thebalance.com/why-are-food-prices-rising-causes-
of-food-price-inflation-3306099
Desjardins, J. (2018, January 24). Infographic: A Decade of
Grocery Prices for 30 Common Items. Retrieved from
http://www.visualcapitalist.com/decade-grocery-prices/
Levin, D. (2018). Food Price Outlook. Retrieved from
https://www.ers.usda.gov/data-products/food-price-outlook/
McConnell, C.R., Brue, S.L., & Flynn, S.M. (2015) Economics:
Principles, problems, and policies (20th ed). Boston, MA:
McGraw-Hill/Irwin.