Practical Dad

PracticalDad Price Index for December 2012:  The Basket Cost is Accelerating

The afternoon and evening were spent determining the results of the 47 item PracticalDad grocery market basket and the results were a bit startling.  Listed below are the results for December's Total and Food-only Indices, along with the previous two months. For a complete list of the 47 basket items, see here.

Month     Total Index     Food-only     Spread

10/12      106.42           111.80            5.38

11/12      107.06           113.04            5.98

12/12      108.07           114.33            6.26

The total cost of the basket rose to an average of $192.79 for a December 2012 index level of 108.07 (November 2010 = 100); this is a full point increase from the November 2012 index level of 107.06.  Consequently, the cost of purchasing the same 47 items since November 2010 has risen more than 8%.

What caught my eye was that when the ten non-food items (such as foil, soap, shampoo, diapers, etc.) are stripped from the basket and foodstuffs alone are considered, the Food-only Index has risen further and at an even higher rate than the Total Index.  The Food-only Index actually rose more than 1.25 points to an index reading of 114.33 (November 2010 = 100); the upshot is that considering the 37 food items alone (such as eggs, milk, a pound of ground beef, sugar, etc.), the cost of buying the same identical foodstuff items has risen 14.33% from November 2010.

The "Spread" column refers to the difference between the two indices - the 37 food item index and the complete 47 item index - and is indicative of the way that food prices alone are rising when compared against a basket that also comprises non-food items.  I make no pretense it is a statistically valid measure given the paucity of items, but it is a measure that's more easily comprehensible to the average person.  The long and the short of the spread is that it shows that when the effect of non-food prices are stripped away, the basket's food prices themselves are increasing at an even greater pace.

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