Specifically, prices in the bureau’s “Food at Home” category for April in Honolulu were 11.8% higher than when the pandemic started in March 2020, and 4.5% higher than the same period last year, when prices were already starting to take off, the bureau’s data shows.
The bureau’s Consumer Price Index measures what urban consumers pay for a basket of goods and services, including food, housing, clothing and transportation. Factoring in all of these things, consumer prices in Honolulu in the first quarter, covering January through March, were just 1.5% higher than the first quarter of 2020, bureau data shows. The statewide CPI was about the same, 1.6% for the first quarter.
The Hawaii and Honolulu increases were markedly lower than what showed up in more up-to-date national CPI numbers, which the bureau released in May. The monthly national CPI for April surprised economists when it showed a 4.2% increase compared with April 2020.
Economists in Hawaii must wait for the bureau’s second-quarter report covering April through June to get a sense of CPI increases for the state and Honolulu, said Carl Bonham, executive director of the University of Hawaii Economic Research Organization. That report could show costs in Hawaii reflecting the national trend, he said.
In the meantime, the bureau does report monthly price data for certain items, but only for Honolulu. These include the cost of food, including “food at home,” which essentially means groceries. Those numbers reflect what Nakamura has seen: an impossible-to-miss rise in the cost of eating at home that she first started to see about a year ago.
One of the first things Nakamura noticed, she said, was rising prices for things like green onions.
“I couldn’t believe it; we couldn’t find green onions,” she said. She finally found them at a grocery store, but for $4 a bunch. “That’s unheard of,” she says. Before the pandemic, she said, she could often find green onions on sale for 99 cents.
To cut costs, Nakamura says, she’s made it a point to shop around. She peruses grocery ads to find sales, buys direct from the Kakoo Oiwi Farm in Kaneohe, even barters with neighbors, trading things she started growing at home, like basil and green onions, for avocados and mangoes. She’s also found helpful communities on the Facebook sites 808 Green Thumbs and 808 Edible Green Thumbs.
“I’m shopping less in general, being careful about cutting costs,” she said.
How Permanent Is This?
Ask people in the food and grocery business, and they’ll cite a thorny knot of reasons for the spike that can be summed up fairly simply: there’s a shortage of nearly everything — “inputs,” they call them — relative to demand. Raw materials, packaging, labor, shipping capacity: all are in short supply amid a surprisingly fast recovery, in part because of bottlenecks in the supply chain.
Giant food manufacturers like Coca-Cola, General Mills and Nestle see the trend, according to a recent report in “Food Dive,” a food industry trade magazine.
Local food manufacturers also see it, said Dave Yarber, the owner of SKY Kombucha. Even simple things like bottles and bottle caps are now hard and slow to come by, Yarber says. It’s all leading to “rising prices and shrinking availability,” he said.
Locally owned retailers also see it.
“We get price increases every other day from our suppliers,” said Paul Kosasa, president and chief executive of ABC Stores. Increases in ordinary times “are not unusual, but it’s more than normal” these days, he says.
But raising rates too much too fast can lead things to slow down too fast, what Wall Street types call a “crash landing,” and even a recession. Jerome Powell, the current Fed chair, has said the central bank has no plans to raise rates. And after initially saying a rate increase might be in order, Janet Yellen, the former Fed chair and current Treasury Secretary, walked back the comments.
The price of groceries rose nearly 12% between the start of the pandemic and March, according to data from the U.S. Department of Labor’s Bureau of Labor Statistics published by the University of Hawaii Economic Research Organization.
Bonham is among those who sees the current price rises as temporary.
“The real issue is, ‘How permanent is this?’” he said. “I’m not of the opinion that we’re suddenly facing runaway inflation.”
That doesn’t mean prices will go down any time soon, Bonham said. But some increase in the inflation rate might be acceptable to let the economy continue to recover.
“Three percent for a couple of years is not the end of the world,” he said.
That could mean a continuing increase in the cost of living for people like Hisae. While she hardly welcomes rising grocery prices, there is a silver lining, she says. Despite her careful shopping, grocery costs have risen to a point that it’s almost cheaper to eat out – something especially attractive to a working mom with a 5-year-old son who also volunteers with the Koolaupoko Hawaiian Civic Club.
Department of Labor statistics show that, while costs of food eaten at home increased nearly 12% percent between March 2020 and April 2021, the latest month for which data was available, restaurant prices went up just 3.1% between March 2020 and March 2021, the last month for which data was available.
Before the pandemic, it was clearly cheaper for Hisae to eat at home.
“Now,” she says, “it’s almost the same.”
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