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Commissioner’s Corner
SHARE ON:
Looking at Recent Price Increases for Baby Food
Thursday, January 19, 2023
At BLS, we try to be transparent about our methods, through publications like the Handbook of Methods and through responses to questions. BLS staff across the country answer questions by phone, email, and through our website, and we still get the occasional piece of snail mail. These questions often relate to topics of current interest, so you won’t be surprised to learn that many recent questions are about our measures of inflation.
We received a question that asked about inflation, but it really focused on the shortage of infant formula that was in the news throughout much of 2022. Being both precise and transparent, the BLS response included a lot of detail about how we measure the change in the price of baby food. To me, this was a good example of the amount of detail that goes into producing an accurate measure of inflation, so I thought I’d share this more widely.
First, let me set the stage. The Consumer Price Index (CPI), which has been around for over a century, measures the average change over time in the prices paid for a market basket of consumer goods and services. We determine this change by identifying the price of a specific good or service and subsequently identifying the price of the exact same good or service in the next period, typically 1 month later.
I’ve used this space before to talk about this matched-model approach that we follow. We use detailed specifications to ensure we are gathering the price for the same item over time (“match”), or we make an adjustment to account for any changes to that item. So, let’s see how this approach applies to baby food.
We received this question recently:
Would you be able to clarify what is included in the "baby food" measure in the CPI? We are wondering if it includes only solid baby food, or does it include baby formula (liquid and powder) as well?
Perhaps the reference to baby formula stemmed from the recent shortages. In fact, the CPI does not have a separate category for baby formula, but formula is included in the broader category of baby food.
BLS responded to the question by providing the following information:
This category includes formula, juice, fruit, vegetable, cereal, meat, and snack products designed for newborns, infants, and toddlers.
But we went farther, helping the customer understand the unique items that might be selected and priced as part of our data collection activities. We provided a detailed response, which comes from our data collection instructions. Here’s a list of the detailed information we collect according to those instructions. If some of this makes no sense, read on for some explanation.
| CHARACTERISTIC | DETAILS |
|---|---|
|
TYPE |
|
|
A1 |
Formula |
|
A2 |
Food (pureed) |
|
A3 |
Cereal |
|
A4 |
Snack |
|
A5 |
Juice |
|
A99 |
Other, |
|
FORM |
|
|
B1 |
Powder/dry mix |
|
B2 |
Liquid concentrate (must add water) |
|
B3 |
Liquid (ready to drink/feed) |
|
B4 |
Prepared (ready to eat) |
|
VARIETY OF FORMULA (applies only to A1 spec) |
|
|
C1 |
Milk-based formula with iron |
|
C2 |
Soy-based formula with iron |
|
C3 |
Hypoallergenic formula with iron |
|
C4 |
Iron-free formula |
|
C99 |
Other, |
|
FEEDING STAGE LEVEL (applies only to B4 spec) |
|
|
D1 |
'1' foods |
|
D2 |
'2' foods |
|
D3 |
'3' foods |
|
D4 |
'4' foods (toddler/tots) |
|
D5 |
No designated label |
|
D99 |
Other, |
|
ORGANIC LABELING |
|
|
E1 |
Labeled 100% organic |
|
E2 |
Labeled organic |
|
E3 |
Labeled made with organic ingredients |
|
E4 |
Contains some organic ingredients |
|
E5 |
No organic claim |
|
BRAND TYPE |
|
|
F1 |
National brand |
|
F2 |
Private label/store brand |
|
F99 |
Other, |
|
BRAND NAME |
|
|
G99 |
|
|
SUB-BRAND/PRODUCT LINE (if applicable) |
|
|
H99 |
|
|
PACKAGING |
|
|
I1 |
Can |
|
I2 |
Glass jar |
|
I3 |
Plastic bottle |
|
I4 |
Plastic tub or container |
|
I5 |
Pouch |
|
I6 |
Box |
|
I99 |
Other, |
|
TOTAL PACKAGE SIZE |
|
|
J99 |
|
|
MULTIPACK |
|
|
K1 |
Single unit |
|
K99 |
Multipack, number of individual units, |
|
INDIVIDUAL UNIT SIZE (select if K99) |
|
|
L1 |
Individual unit size not labeled |
|
L99 |
Individual unit size, |
|
VARIETY/FLAVOR (DO NOT USE IF A1) |
|
|
M99 |
|
|
OTHER PRICE FACTORS |
|
|
N99 |
|
|
O99 |
|
|
P99 |
|
|
OTHER CLARIFYING INFORMATION |
|
|
Q99 |
|
|
R99 |
|
|
S99 |
|
Ensuring we obtain the price for matched items from one period to the next requires us to identify a lot of detail. The instructions above include the detail we need when determining the price for baby food. Some explanation:
- If it is infant formula, among the unique qualities are whether it is powder/dry mix, liquid concentrate, or liquid (ready to drink).
- For prepared food (ready to eat), we make distinctions by the baby’s age (feeding stage).
- Another distinction is whether the item is labeled organic, with several variations.
- We distinguish the variety of formula, such as milk versus soy based.
- For other baby foods, we would distinguish the category, such as juice, fruit, vegetables, or meat.
- We identify the brand and product name.
- And we consider the packaging (can, glass, plastic, etc.) and the package size, along with whether the item is sold individually or in multi-packs.
The incredible cadre of economic assistants who gather these details and the associated prices each month have some initial latitude in identifying the exact item to track, within statistical guidelines. But once an economic assistant selects an item and identifies all these characteristics, those details become the standard that must be matched each month.
Getting back to where the question started: No, BLS does not have a separate index for the price of baby formula, but baby formula is included in the baby food index. Let’s see what’s been happening with that index.
Editor’s note: Data for this chart are available in the table below.
Following some large increases in 2011 and 2012, the 12-month change in the price of baby food ranged from around a 3-percent increase to the occasional small decrease until late 2018. Price changes have been in a wider range since then, including double-digit increases in 2022, which peaked most recently in the summer.
I decided to see how these changes compare with food prices in general, and just for fun, to also graph price changes for pet food. I don’t mean to suggest a substitution, but rather to acknowledge that some people love their pets as much as they love their kids.
Editor’s note: Data for this chart are available in the table below.
We see in the decade before the COVID-19 pandemic that price increases for food, including for baby food and pet food, were relatively modest. However, all three categories have been a part of the broad acceleration of price change during the pandemic.
Let me conclude with a couple of broad observations. No matter what the topic of current interest, BLS is likely to have some information to help understand the issue. And when we examine any of these topics, we do so with great care and in detail. You may not want to know all that goes into determining the price of baby food, but rest assured that BLS knows, and knows how to get it right.
| Month | Percent change |
|---|---|
|
Jan 2012 |
7.5% |
|
Feb 2012 |
5.9 |
|
Mar 2012 |
6.1 |
|
Apr 2012 |
5.1 |
|
May 2012 |
5.5 |
|
Jun 2012 |
4.8 |
|
Jul 2012 |
3.2 |
|
Aug 2012 |
2.1 |
|
Sep 2012 |
2.9 |
|
Oct 2012 |
2.0 |
|
Nov 2012 |
1.4 |
|
Dec 2012 |
2.6 |
|
Jan 2013 |
1.7 |
|
Feb 2013 |
1.5 |
|
Mar 2013 |
2.2 |
|
Apr 2013 |
2.3 |
|
May 2013 |
1.6 |
|
Jun 2013 |
1.0 |
|
Jul 2013 |
1.7 |
|
Aug 2013 |
1.5 |
|
Sep 2013 |
0.1 |
|
Oct 2013 |
1.2 |
|
Nov 2013 |
1.0 |
|
Dec 2013 |
0.1 |
|
Jan 2014 |
0.4 |
|
Feb 2014 |
1.9 |
|
Mar 2014 |
1.0 |
|
Apr 2014 |
1.2 |
|
May 2014 |
2.4 |
|
Jun 2014 |
1.8 |
|
Jul 2014 |
1.7 |
|
Aug 2014 |
2.8 |
|
Sep 2014 |
3.3 |
|
Oct 2014 |
2.4 |
|
Nov 2014 |
2.7 |
|
Dec 2014 |
2.1 |
|
Jan 2015 |
1.9 |
|
Feb 2015 |
0.5 |
|
Mar 2015 |
0.6 |
|
Apr 2015 |
-0.2 |
|
May 2015 |
0.0 |
|
Jun 2015 |
-0.1 |
|
Jul 2015 |
-0.5 |
|
Aug 2015 |
-1.2 |
|
Sep 2015 |
0.1 |
|
Oct 2015 |
-1.0 |
|
Nov 2015 |
-1.4 |
|
Dec 2015 |
-0.5 |
|
Jan 2016 |
0.0 |
|
Feb 2016 |
1.2 |
|
Mar 2016 |
0.7 |
|
Apr 2016 |
0.9 |
|
May 2016 |
0.7 |
|
Jun 2016 |
1.4 |
|
Jul 2016 |
2.0 |
|
Aug 2016 |
1.6 |
|
Sep 2016 |
0.6 |
|
Oct 2016 |
1.7 |
|
Nov 2016 |
2.5 |
|
Dec 2016 |
1.6 |
|
Jan 2017 |
2.7 |
|
Feb 2017 |
1.6 |
|
Mar 2017 |
1.4 |
|
Apr 2017 |
2.6 |
|
May 2017 |
1.6 |
|
Jun 2017 |
2.6 |
|
Jul 2017 |
1.4 |
|
Aug 2017 |
1.8 |
|
Sep 2017 |
1.8 |
|
Oct 2017 |
1.0 |
|
Nov 2017 |
0.3 |
|
Dec 2017 |
0.4 |
|
Jan 2018 |
-0.4 |
|
Feb 2018 |
0.2 |
|
Mar 2018 |
0.9 |
|
Apr 2018 |
0.1 |
|
May 2018 |
1.7 |
|
Jun 2018 |
1.5 |
|
Jul 2018 |
0.9 |
|
Aug 2018 |
1.3 |
|
Sep 2018 |
2.2 |
|
Oct 2018 |
3.6 |
|
Nov 2018 |
6.9 |
|
Dec 2018 |
7.2 |
|
Jan 2019 |
5.9 |
|
Feb 2019 |
5.6 |
|
Mar 2019 |
4.5 |
|
Apr 2019 |
6.0 |
|
May 2019 |
4.1 |
|
Jun 2019 |
4.8 |
|
Jul 2019 |
5.5 |
|
Aug 2019 |
5.8 |
|
Sep 2019 |
4.2 |
|
Oct 2019 |
4.3 |
|
Nov 2019 |
1.2 |
|
Dec 2019 |
-0.6 |
|
Jan 2020 |
-1.2 |
|
Feb 2020 |
2.2 |
|
Mar 2020 |
3.6 |
|
Apr 2020 |
5.1 |
|
May 2020 |
5.5 |
|
Jun 2020 |
4.2 |
|
Jul 2020 |
2.5 |
|
Aug 2020 |
1.5 |
|
Sep 2020 |
2.5 |
|
Oct 2020 |
0.7 |
|
Nov 2020 |
2.3 |
|
Dec 2020 |
2.8 |
|
Jan 2021 |
4.2 |
|
Feb 2021 |
0.6 |
|
Mar 2021 |
-0.1 |
|
Apr 2021 |
-1.7 |
|
May 2021 |
-1.4 |
|
Jun 2021 |
-1.0 |
|
Jul 2021 |
1.9 |
|
Aug 2021 |
2.4 |
|
Sep 2021 |
4.4 |
|
Oct 2021 |
7.9 |
|
Nov 2021 |
6.7 |
|
Dec 2021 |
7.9 |
|
Jan 2022 |
7.8 |
|
Feb 2022 |
8.4 |
|
Mar 2022 |
10.8 |
|
Apr 2022 |
13.0 |
|
May 2022 |
12.9 |
|
Jun 2022 |
14.0 |
|
Jul 2022 |
15.0 |
|
Aug 2022 |
12.6 |
|
Sep 2022 |
11.8 |
|
Oct 2022 |
10.9 |
|
Nov 2022 |
10.9 |
|
Dec 2022 |
10.7 |
| Period | Food at home | Baby food | Pet food |
|---|---|---|---|
|
March 2010–March 2020 |
1.3% | 2.1% | 0.8% |
|
March 2020–December 2022 |
7.5 | 6.7 | 5.9 |