Wondering if inflation is cooling? One Fed official suggests keeping an eye on frozen lasagna prices

February 8, 2023, 3:29 PM UTC
A boxed Stouffer's frozen lasagna.
Frozen lasagna prices are a great way to monitor inflation, according to Neel Kashkari, president of the Federal Reserve Bank of Minneapolis.
Julie Thurston Photography/Getty Images

As inflation hit 40-year highs in 2022, market participants looked to the consumer price index to monitor how rapidly prices were changing.

However, one Federal Reserve official has revealed he has his own unconventional method for keeping an eye on inflation—and it’s accessible to anyone.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, told CNN in an interview on Wednesday that he checks the price of frozen lasagna. He previously told his local newspaper, The Star Tribune, that he monitors Stouffer’s party-size offering.

“I pay attention to grocery prices,” Kashkari said on Wednesday. “There’s this large tray of lasagna that I used to buy that used to cost $16, now it’s around $21. That’s my own little measuring stick of how inflation is going.”

Stouffer’s did not immediately respond to Fortune‘s request for comment.

Food inflation has been a big driver in spiraling living costs over the past year, with grocery prices showing no signs of slowing down even as consumer spending cooled toward the end of 2022. The price of many staples, such as eggs, have skyrocketed.

Americans ‘reluctant’ to make large purchases

With the cost of food remaining elevated, Americans are looking for other ways to cut their spending.

Purchases in stores, restaurants and online fell 1.1% between November and December, while overall consumer spending fell 0.2% between November and December—signs that the Fed’s interest rate hikes may be working to cool down the economy and fight inflation.

Meanwhile, data released by the Federal Reserve on Tuesday showed that U.S. consumers’ outstanding credit saw its lowest monthly growth in December since late 2020.

“We’re seeing a more cautious consumer,” Ted Rossman, a senior analyst at Bankrate, told CNN in an interview on Tuesday. “Consumer spending certainly isn’t falling off a cliff, but we are seeing evidence that Americans are becoming reluctant to make certain purchases, especially larger expenses and acquiring physical goods.”

Rossman isn’t the only analyst to have noticed a shift in the consumer mindset from confident to cautious.

In a news release last week, Brittany Billings, EVP of strategic markets and marketing at consumer rewards company Shopkick, said her teams had noticed American shoppers were becoming more vigilant when it came to expenditure.

Shopkick’s January survey of more than 11,000 consumers across the U.S. found that 70% were anxious about the economic climate, and 47% were planning to cut their spending over the next three months.

Consumers’ main goal in 2023 was to purchase only the essentials, such as groceries, toiletries, and medicine, the company said.

“Consumers…continue to be extremely wary of overspending and diligent about finding ways to save,” Billings noted.

Which goods are Americans spending—and not spending—their money on?

Despite a spending slowdown in recent months, data published at the end of January by the U.S. Bureau of Economic Analysis showed that personal spending on goods increased by around 7% between Dec. 2021 and Dec. 2022.

Durable goods, like books and electronics, and clothing were among the items that saw the biggest spend increase.

However, more detailed data from the Census Bureau showed that spending on big-ticket goods like vehicles, furniture, appliances and electronics began to cool toward the end of the year.

In November, a Bankrate study found that the majority of Americans were delaying financial milestones—like buying a home, getting married or having children—because of economic anxiety.

Most of the study’s 2,442 participants also said they had opted out of activities and events because of economic concerns, which meant avoiding expenses like taking a vacation, going to the movies or dining out with friends.

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