Increasing affordability of goods and services has been a major long-term trend in US economics. But that trend has reversed since 2006, according to Thomas Elam of FarmEcon, leading to decreased spending on consumer goods and services and hindering job growth.
Food prices are increasing compared to those of other goods, and consumers’ food costs are increasing relative to disposable income. As a result, the gap between the 1950-2005 long-term affordability trend and actual food cost is growing. That means consumers are spending more of their money on food than ever before—the last time the gap grew in a similar manner was during the mid-1970s when farm commodity prices boomed on strong grain exports, but even that gap was much smaller than the current one.