White House claims “inflation is over” as U.S. grocery bills surged to 3-year high right before 2026

December grocery bills caught shoppers off guard

Food prices jumped 0.7% from November to December 2025, the biggest single-month increase in more than three years, according to the Bureau of Labor Statistics (BLS).

Both grocery store prices and restaurant meals rose by the same amount. Over the full year, food prices climbed 3.1%, outpacing overall inflation, which held at 2.7%.

Five of the six major grocery categories saw prices rise in December.

Beef and coffee drove December higher

Two items drove much of the December spike.

Beef and veal prices jumped about 16% compared to a year earlier, pushed up by a cattle herd that had shrunk to its smallest size since the early 1950s.

Strong consumer demand kept prices climbing even as supply tightened. Candy and sweets also climbed by around 10%.

Coffee prices surged roughly 20% year over year after extreme weather damaged harvests in Brazil and Vietnam, the world’s two largest producers.

Egg prices bucked the trend

Not everything went up. Egg prices dropped about 21% year over year in December after bird flu cases eased across the country.

A dozen eggs cost about $2.71 in December 2025, well below the roughly $6 peak earlier in the year. Dairy prices also dipped 0.9% for the full year, and pork prices fell 1.4% from November to December.

Both were among the few grocery categories to finish the year lower.

Eating out got pricier too

Restaurant prices rose 4.1% year over year in December, well above overall inflation.

Full-service restaurants saw prices climb about 4.9% over the year, while fast food and limited-service spots increased about 3.3%. Restaurant operators pointed to rising labor costs and higher utility bills as key reasons for the increases.

Those added costs squeezed already-thin profit margins, giving restaurant owners little room to absorb expenses without raising menu prices.

Trump said inflation was “defeated”

At the World Economic Forum in Davos, Switzerland, in January 2026, President Trump told world leaders the U.S. had “defeated” inflation and that grocery and energy costs “are all coming down fast.”

He made a similar claim the same day the December Consumer Price Index was released, Jan. 13, at a speech in Detroit. Federal data released that day showed food prices had risen in December, not fallen.

Overall inflation at 2.7% remained above the Federal Reserve’s 2% target. The BLS Consumer Price Index 2025 year-in-review confirmed those figures.

Some prices did fall during 2025

Trump’s first year did see price drops in several categories.

Gasoline fell about 3.4% over the course of 2025. Airline fares declined more than 3% year over year in December.

Egg prices dropped sharply in the second half of the year. Bacon, dairy products, and bread also saw price decreases.

Mortgage rates fell below 6% for the first time in years, helped in part by a White House push to buy mortgage-backed securities.

A government shutdown skewed the data

Economists warned that the December jump may have looked worse than it actually was.

The federal government shut down from Oct. 1 to Nov. 12, 2025, which stopped the BLS from collecting price data in October.

When data collection resumed in mid-November, it captured heavy holiday discounting that made November prices look artificially low.

A BlackRock analyst said those deeper-than-normal discounts set up a rebound when prices returned to normal in December.

The New York Federal Reserve estimated underlying inflation was closer to 3% once those distortions were removed.

Here is what items actually cost

The numbers hit differently when you see them in dollars and cents.

According to Federal Reserve Bank of St. Louis data, ground coffee cost $9.05 per pound in December 2025, up from $6.78 a year earlier. Boneless sirloin steak ran $14.03 per pound, up from $11.67.

A can of frozen orange juice concentrate costs $4.82, up from $4.29. Bananas cost 66 cents per pound.

The Democratic staff of the Joint Economic Committee estimated families paid about $310 more for groceries in 2025 compared to 2024, using their own methodology applied to BLS data.

Food costs rose faster than history suggests

For all of 2025, grocery prices rose 2.4%, faster than the roughly 2.6% 20-year historical average, according to the U.S. Department of Agriculture (USDA).

Nonalcoholic beverages jumped 5.1% for the year, driven largely by an 11.8% rise in coffee and tea. Meats, poultry, fish, and eggs as a group rose 3.9%.

Cereals and bakery products increased 1.5%. Fruits and vegetables edged up just 0.5%, making them one of the more affordable categories at the grocery store.

Tariffs could push prices higher in 2026

Economists said the December food price spike came mostly from supply problems, not tariffs. The shrinking cattle herd started contracting around 2019, and coffee prices reflected global crop failures.

But tariffs are expected to add pressure going forward. The Peterson Institute estimated tariffs Trump announced in 2025 could amount to a tax increase of more than $1,200 per household overall.

The Congressional Budget Office found tariffs covered 44% of food imports and effectively imposed a 12% tax on imported food.

Economists said the full impact would likely become clearer in 2026.

January showed prices cooling down

Food prices rose just 0.2% month over month in January 2026, a sharp slowdown from December’s 0.7% jump, according to the BLS Consumer Price Index release for January 2026.

Grocery prices also rose only 0.2%, and restaurant prices moderated to a 0.1% monthly increase. Overall inflation fell to 2.4% year over year in January, down from 2.7% in December.

Beef, egg, and coffee prices all declined. The USDA predicted grocery prices would rise 1.7% in 2026, slower than the historical average.

Americans remain frustrated at the checkout

Consumer sentiment has fallen steadily in recent months and sat near all-time lows heading into 2026. A Reuters/Ipsos poll found 61% of respondents disapproved of Trump’s handling of the cost of living.

Overall, food prices have climbed roughly 19% since January 2022, according to CBS News tracking of BLS data. Polls showed a majority of Americans believed both the economy and the country were worse off.

The nonpartisan American Action Forum noted that no major progress on inflation had been made between the start of 2025 and the start of 2026.

This article was created with AI assistance and human editing.

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