One thing that’s moving markets 

… is a trend-bucking price decline of grocery store staples, with meats, poultry, fish, and egg costs rolling back 0.7%, led by eggs cracking down a hearty 7.3% month-over-month in April.¹  

Until now, the cost of eggs has been on the rise with triple-digit year-over-year increases throughout 2022 and early 2023.² The price decrease of these items could provide some much-needed relief to consumers’ grocery bills. 

Americans spend more than 11% of their disposable income on food – the highest level in three decades – so any reprieve can go a long way toward building a financial cushion and giving consumers more options in discretionary spending.³ 

Inflation – and foodflation in particular – has already altered consumer behavior: In their latest earnings calls, major restaurant chains like McDonald’s, KFC-owner Yum! Brands, and Starbucks all noted price-conscious shoppers who are more selective with their purchases.⁴ 

The foodflation numbers 

Food inflation within government data is divided into two smaller groups: "food at home" and "food away from home,” with the former covering food in grocery stores and the latter tracking changes for snacks and service meals at restaurants. In April, food at home saw a 0.2% decrease, while food away from home rose 0.3%.¹ 

Monthly grocery spending amounted to $573 in April, on par with March’s $578, according to Empower Personal Dashboard^TM data. According to the latest Consumer Price Index (CPI) report, overall food prices in April were unchanged from March, but 2.2% higher annually.¹  

From 2019 to 2023, the all-food CPI increased by 25%, making even the slightest uptick in foodflation hard to stomach.⁵ In the most recent report from the New York Fed, consumers anticipate increasing food prices – suggesting significant “foodflation” has become the norm for American consumers.⁶ 

Why it matters 

Food is a fundamental necessity within every consumer’s budget, so Americans can’t meaningfully avoid the increase in prices every month. Households can choose to eat out less or, in some cases, switch to cheaper alternatives. 

But for the most part, discretionary purchases will decline when rising food prices squeeze budgets. For that reason, foodflation has a powerful impact on consumer financial health, spending habits, and sentiment. For instance, 54% of younger Americans say food costs have hit them harder than any other expense.⁷ 

Economists believe this gradual slowdown in inflation growth (or “disinflation”) is often preferable to an outright decrease in prices (or “deflation”). Deflation might signal sharp weakness in the economy, while disinflation suggests the economy is moderating at a sustainable rate.⁸ 

And a few top headlines 

The IRS increased the 2025 contribution limits for health savings accounts (HSAs) to $4,300 for individuals and $8,550 for families, due to inflation adjustments.⁹ 

• These changes will provide individuals with greater tax-advantaged savings on medical expenses through upfront deductions for contributions and tax-free investment gains. 

Airlines are now required to automatically provide cash refunds for significant flight delays, cancellations, and undelivered services, including baggage delivery and seat selection.¹⁰ 

• This mandate defines a "significant" delay as at least three hours for domestic flights and six hours for international flights, giving consumers legal financial recourse for their travel delays. 

The U.S. Department of Education is expected to announce an increase in interest rates on federal student loans for the 2024-2025 academic year to approximately 6.5%, up from 5.5% the previous year.¹¹ 

• The official rate will be announced in the coming weeks, but the rise in Treasury yields is expected to make borrowing for education more expensive for students starting in July. 

What to be on the lookout for next week 

Chipmaker NVIDIA will report its first-quarter earnings on Wednesday, May 22. 

In its last earnings report, the company, which primarily advances functionality in artificial intelligence, dramatically exceeded expectations with a 265% year-over-year increase in revenue and a 765% annual increase in earnings.¹² The strong figures were a clear sign that demand for its AI-powering GPUs was incredibly high. Following were broad-based gains among other chip and AI-adjacent companies. 

Investors will be watching this next report closely to see if the heightened demand for GPUs and AI is still alive and well.