Where grocery prices are headed

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Kimberly Adams (0:54)

What the latest inflation data tells us about food prices.

From Marketplace in Washington, I'm Kimberly Adams. We learned yesterday that prices rose at a faster rate than expected in September. Inflation is running 3.7% year over year. One bright spot, grocery prices are only rising at about half the overall rate. But there are signs that high diesel prices are beginning to change that. Marketplace's Samantha Fields reports.

Samantha Fields (1:22)

Even though grocery prices are rising much more slowly than prices in general, William Masters at Tufts says people aren't feeling it.

William Masters (1:30)

When most people go to the grocery store, what they're seeing is the hangover from the 2022-23 post-COVID inflation. That means the shelf prices remain elevated.

Samantha Fields (1:41)

Groceries are about 30% more expensive now than pre-pandemic, and wages just haven't kept up. Plus, David Ortega at Michigan State says everyone experiences food inflation differently.

David Ortega (1:53)

If you're not buying eggs, you're not benefiting from these lower egg prices. If you're buying some of the fish and seafood that is up significantly over the past year, that's going to hit you a lot harder.

Samantha Fields (2:03)

Even though overall food inflation is low, he says certain prices are starting to take up again, like for some frozen foods and fresh fruits and vegetables.

David Ortega (2:12)

These are products that have to be refrigerated, that are perishable, that have to travel long distances.

Samantha Fields (2:18)

All of which requires expensive diesel. I'm Samantha Fields for Marketplace.

Kimberly Adams (2:24)

The United Nations released a new report this week on how skyrocketing borrowing costs are challenging developing nations carrying debt. Marketplace's Nancy Marshall Ginzer has more.

Nancy Marshall Genzer (2:35)

The report from the United Nations Development Program says the median developing country now spends about 9.5% of its revenue on interest payments, the biggest share of revenue in 25 years. At the same time, these countries are dealing with soaring energy prices. They're also trying to prepare for one of the most powerful El Ninos on record, which could threaten their harvest and push up food prices. It's expected to cause drought in some parts of the world and flooding in others. Developing nations have been trying to help their citizens cope with a higher price of gas and food through things like subsidies and tax rebates. But the UN says they may not be able to afford to keep doing that, partly because of the high interest rates they're paying on their debt.

According to the UN report, without that extra help from the government, about 130 million additional people would have been pushed into poverty worldwide this year.

I'm Nancy Marshall Genzer for Marketplace.

Kimberly Adams (3:48)

Now, let's get some perspective on this economy from the boardrooms of big companies across the country. The audit tax and advisory firm KPMG is out with its new CEO outlook survey this morning, and no surprise, artificial intelligence is among the issues top of mind. Joining us now to talk about it is Tim Walsh, Chair and CEO of KPMG US. Good morning, Tim.

Tim Walsh (4:10)

Good morning. It's great to be with you here today, Kimberly.

Kimberly Adams (4:14)

You all surveyed 400 CEOs of large companies for this survey. How big of a deal was AI in this year's results?

Tim Walsh (4:23)

Well, as you'd expect, it is very, very prominent in the results, and it shows up in a couple of different areas for sure. Innovation, it's certainly around return on investment. It's around governance in the boardroom and then certainly around cybersecurity risk.

Kimberly Adams (4:39)

Four out of five of the CEOs in your survey said they recognize that AI will change company business models. What are they anticipating?

Tim Walsh (4:47)

Well, they're anticipating a number of different things. One is how they actually run their businesses for sure, optimizing processes, cleaning up data, and then of course embedding AI technologies to help them be more effective and efficient. But it's also focused on how they bring product to market, regardless of what product that might be.