Food costs take up a smaller share of the average U.S. household budget than they did decades ago, according to long-running federal spending and price data. But in grocery aisles across the country, shoppers are still seeing noticeably higher shelf prices than they did before the 2021 to 2023 inflation run-up. That disconnect helps explain why food can feel expensive even when Americans are devoting less of their total spending to it over time.
Americans are spending a smaller share of income on food
The U.S. Department of Agriculture has long tracked food spending as a share of disposable personal income, and its historical data shows that share has fallen sharply over the last several decades. In the 1960s, Americans spent a much larger portion of their budgets on food than they do now. More recent USDA figures show that food spending has remained comparatively low as a share of after-tax income, even as prices have risen.
That broad trend does not mean grocery bills are lower in dollar terms. The Bureau of Labor Statistics has reported that food-at-home prices rose quickly during the inflation surge that followed 2020. In practical terms, households may be spending a smaller slice of a larger paycheck or budget, while still paying more each week for eggs, meat, dairy, and packaged staples.
Grocery prices are still elevated at the store level
The most immediate reason food still feels expensive is that consumers compare current prices with what they paid just a few years ago. BLS consumer price data showed food-at-home inflation accelerated in 2022, and even after that pace cooled, many prices stayed above their pre-pandemic levels. A slower rate of inflation does not erase earlier increases.
The national picture also looks different depending on where and how people shop. A household in New York City, Phoenix, or Atlanta may face different prices for produce, beef, or milk based on freight, labor, and store competition. The federal data confirms inflation has cooled from its peak, but it does not mean a full return to 2019 grocery prices, and agencies have not said that broad grocery prices have reset.
Wages, housing, and habits shape how shoppers feel the squeeze
The larger context is that shoppers do not experience food costs in isolation. When rent, insurance, utilities, and child care rise, even a historically smaller food budget share can feel difficult in real life. Federal inflation reports over the last several years have shown price pressure across multiple household categories, not just groceries.
What that means for customers is simple: checkout totals may continue to feel high even if food takes up less of the average household budget than it once did. The long-term data points to a decades-long decline in food’s share of spending, while recent inflation data shows many grocery prices remain elevated. For shoppers, both facts can be true at the same time, and current federal reports reflect that split clearly.
