Upstream Pressure

The Grocery Gap

Gap between average hourly earnings growth and food-at-home inflation

What is the current The Grocery Gap?

WAGE LEAD OVER GROCERY INFLATION
0.37 pts ↓ Worsening
wage growth lead over food-at-home CPI as of May 2026
One year ago
1.09 pts ↓ Worsening
down 0.7 points since May 2025

Wage growth is running 0.4 percentage points ahead of food-at-home CPI in the latest reading — a sliver of cushion that has narrowed from a roughly 1.3pp lead a year earlier. The Grocery Gap measures this spread between average hourly earnings growth and food-at-home inflation; when positive, paychecks are gaining ground on grocery prices, when negative, food is outpacing wages. Source: BLS (Average Hourly Earnings minus Food-at-Home CPI).

The gap between wage growth and grocery inflation has narrowed to 0.4 points as of May 2026 — the thinnest margin since food prices started climbing again in late 2024.

For a long stretch of 2023 and 2024, groceries were the one part of the household budget where workers were catching up. Wage growth ran more than a full point ahead of food-at-home CPI. The lead peaked near +1.5 percentage points. Grocery prices had already done their damage, and earnings were finally gaining ground.

That cushion has nearly closed. BLS data shows the Grocery Gap tightened to 0.4 points in May 2026. Food prices are reaccelerating. Wages are still growing, but not fast enough to keep the daylight visible.

A thin lead is not a win. It means the average hourly earner is treading water on one of the most frequent transactions in their budget. For households where grocery spending consumes a larger share of the paycheck, which is most households in the lower-income side of the distribution, the cushion closed much earlier and much harder.

Grocery Prices Cumulative Change Since Jan 2020 tells the other side of this story. Food prices have climbed substantially since the start of 2020 and continue to drift higher most months. The annual rate cooling and then reaccelerating doesn't reverse that accumulation. It just restarts it.

Explore Further

Is this happening to you?

Are you spending more on groceries even though you're buying less?

How has The Grocery Gap changed over time?

CSV Chart Card
The cushion between wages and grocery prices has nearly closed
BLS Average Hourly Earnings YoY minus Food-at-Home CPI YoY, percentage points
The Grocery Gap
Historical data
Monthly · Computed (BLS Average Hourly Earnings YoY - Food-at-Home CPI YoY)
Period Value YoY Change
May 2026 0.37 pts −0.7 pts
Apr 2026 0.35 pts −0.8 pts
Mar 2026 0.69 pts −0.6 pts
Feb 2026 0.56 pts −1.0 pts
Jan 2026 0.72 pts −0.8 pts
Dec 2025 0.69 pts −0.9 pts
Nov 2025 1.31 pts −0.5 pts
Sep 2025 0.73 pts −0.9 pts
Aug 2025 0.78 pts −1.1 pts
Jul 2025 1.07 pts −0.4 pts
Jun 2025 0.86 pts −0.8 pts
May 2025 1.09 pts −0.9 pts

Frequently Asked Questions

What is The Grocery Gap?

It measures the spread between average hourly earnings growth and food-at-home CPI inflation. The latest reading is roughly 0.4 percentage points, meaning wages are barely outpacing grocery prices.

Why does the grocery gap matter?

Food is non-discretionary. When the gap narrows or turns negative, lower-income households — who spend 25-35% of income on food — see groceries eat a larger share of every paycheck.

Where does this data come from?

Computed from BLS Average Hourly Earnings (CES0500000003) year-over-year change minus Food-at-Home CPI (CUSR0000SAF11) year-over-year change.

Ross Kilburn
Written by

Ross Kilburn, Founder

American Default Research · Seattle, Washington

Two decades working directly with financially distressed American households — from property preservation in 2003, to negotiating over 1,000 short sales during the Great Recession, to foreclosure defense marketing today. Author, The Ark Law Group Complete Guide to Short Sales (Auroch Press, 2013). Twice named to Puget Sound Business Journal Fast 50 for Ark Law Group. B.A., University of California, Berkeley, 1992. Founded American Default Research in 2026 to fill a gap in public data that had been empty since 2013.

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Why does The Grocery Gap matter?

The Grocery Gap is one of 88 live indicators tracked by American Default Research. The methodology page explains sources, update cadence, and how the index uses its published inputs.
View methodology →
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