How did energy and food price trends differ from 2024 to 2025?
Executive summary
Energy and food prices followed different trajectories from 2024 into 2025: U.S. food prices slowed in 2024 (food prices rose about 2.3% in 2024) but accelerated into 2025 with forecasts and measured annual gains around 3.0–3.2% by mid‑2025 (ERS forecast 3.0% for 2025; BLS and related data show ~3.1% food increase year‑over‑year to Sept. 2025) [1] [2]. Energy moved from larger swings to more moderate net increases in 2025 — the BLS reports the energy index up 2.8% for the 12 months to September 2025 while natural gas and electricity showed big sectoral gains (natural gas +11.7%, electricity +5.1%) [3] [2].
1. Food prices: cooling in 2024, re‑accelerating in 2025
After very large increases in 2022, food price growth slowed: USDA ERS and its charts show food price growth decelerated to about a 2.3% increase in 2024, with food‑at‑home up just 1.2% and food‑away‑from‑home up 4.1% in 2024 [1] [4]. ERS predicted overall food prices would rise about 3.0% in 2025, a slightly faster pace than the 20‑year average [1]. BLS monthly CPI reporting through September 2025 records food up about 3.1% year‑over‑year and confirms food‑at‑home and food‑away‑from‑home both contributing to that rise [2] [5].
2. Energy: volatile components but modest headline rise in 2025
Energy exhibited shorter‑term volatility but a modest headline gain across the year. The BLS CPI release and supporting tables show the energy index increased 2.8% for the 12 months ending September 2025, with gasoline and other subcomponents swinging month‑to‑month (gasoline surged in some months and fell in others) [3] [5]. Producer prices also point to upward pressure in processed energy goods in 2025 (a 0.9% rise in September’s PPI) [6].
3. Sectoral contrasts: durable rises in services and specific energy fuels
Food‑away‑from‑home and menu prices were persistent sources of inflation: restaurants’ menu prices rose faster than groceries through parts of 2025 (menu prices +3.7% year‑over‑year since Sept. 2024), while grocery (food‑at‑home) accelerated in mid‑2025 [7] [8]. Within energy, natural gas and electricity rose sharply year‑over‑year (natural gas +11.7%, electricity +5.1% to Sept. 2025), meaning household energy bills rose even as headline energy inflation was more muted [2].
4. International and model‑based perspectives show different net directions
Global commodity trackers provide a different picture: the World Bank expected the food commodity index to decline further in 2025 after a large fall in 2024 (projecting an additional ~4% decline in the food price index in 2025), highlighting divergence between global commodity prices and U.S. retail food inflation driven by services, supply chains, and labor costs [9]. OECD commentary through 2025 likewise noted rising food inflation in some countries while energy price declines slowed, underlining cross‑country variation [10] [11].
5. Why the divergence? supply‑side vs. downstream service pressures
The sources point to contrasting drivers: commodity prices and farm‑level indices declined through 2024 and into 2025 in some global measures (World Bank), but retail food prices depend heavily on processing, transportation, and labor costs — which kept U.S. consumer food inflation around 3% in 2025 [9] [4] [1]. Energy’s headline moderation masks large swings within fuels: gasoline volatility drove monthly CPI swings while natural gas and electricity increases pushed certain household bills higher [5] [2] [3].
6. Alternative viewpoints and limitations in the record
Available sources show two competing impressions: (a) macro commodity indices projecting lower global food prices into 2025 (World Bank) and (b) U.S. consumer‑level measures showing renewed food inflation in 2025 (ERS forecast and BLS measured CPI) [9] [1] [2]. Sources do not provide a unified causal decomposition attributing exact shares to labor, energy, or supply shocks; detailed attribution is not found in current reporting (not found in current reporting).
7. What this means for consumers and policy
For consumers, the mix matters: grocery inflation eased in 2024 then accelerated in 2025, while utility and natural gas bills rose substantially even though headline energy inflation was modest [4] [2]. For policymakers, the divergence implies different tools: global commodity abundance can temper farm prices (World Bank), but domestic wage, service‑sector, and energy‑distribution dynamics are central to the retail pain felt by households [9] [1].
Limitations: this summary relies on U.S. CPI/ERS snapshots and global World Bank/OECD outlooks provided in the cited sources; granular monthly breakdowns, regional variation, and post‑September 2025 data are not available in the supplied excerpts (available sources do not mention more recent months).