Menu Prices

Consumer price data were limited in the latest CPI release due to the government shutdown. Headline inflation rose 2.7% year-over-year in November, easing from 3.0% in September, with no annual figure published for October. Core CPI—which excludes food and energy—climbed 2.6% over the past 12 months, down from 3.0% in September and marking the slowest pace of underlying inflation since March 2021.

At the same time, the Federal Open Market Committee lowered short-term interest rates by 25 basis points at its December 9–10 meeting, its third consecutive cut. Policymakers signaled that additional reductions are likely in 2026, though at a measured pace. The Federal Reserve remains more concerned about a cooling labor market than inflation pressures, even as price growth continues to run somewhat above its 2% long‑run objective.

Looking ahead, the Fed is expected to maintain its data‑dependent stance in shaping monetary policy. While it is too soon to determine whether rates will be cut at the January 27–28 or March 17–18 meetings, a move at one of those meetings appears likely in our view.
 

Menu prices jumped between September and November

Menu prices jumped 0.5% over the two-month period from September to November, a solid gain after edging up 0.1% for the month of September. So far this year, prices for food away from home have averaged monthly growth of 0.3%. On a year-over-year basis, menu prices have risen 3.7% since November 2024. As such, menu inflation remains firm, though well below the 8.8% peak seen in March 2023, the fastest rate in over two decades.

Grocery prices fell 0.7% over the two-month period from September to November, pulling back after experiencing strong monthly growth of 0.4% in August and 0.5% in September. Year-over-year, the CPI for food at home rose 1.9% in November, down from 2.7% in September. Grocery inflation has cooled considerably from its 13.5% peak in August 2022.

In the food away from home category, menu prices at fullservice restaurants increased 0.6% over the two-month period from September to November, with prices averaging 0.4% growth each month so far this year, a solid pace. Meanwhile, limited-service menu prices increased 0.4% over the two-month period, with a monthly rate of 0.2% through the first 11 months of 2026.

On a year-over-year basis, full-service menu prices increased 4.3% in November, while limited-service prices rose 3.0% year-over-year. Inflation in both segments has moderated significantly from earlier peaks: full-service restaurant prices surged as high as 9.0% year-over-year in 2022, while limited-service prices peaked at 8.2% in April 2023.
 

Within the broader food-away-from-home category, prices for food from vending machines fell 0.9% over the two-month period from September to November, erasing most of the 1.6% monthly gain seen in September. Year-to-date, vending machine prices have grown 0.5% each month. At the same time, menu prices at employee sites and schools edged down 0.1% over the two-month period but have averaged 0.3% growth per month so far in 2026. Prices at other food away from home locations increased 0.3% over the two-month period, or 0.4% per month on average from January to November.  

Year-over-year, prices at vending and mobile vendors rose 5.7% since November 2024, with prices for food at employee sites and schools increasing by 3.5%. The broader “other food away from home” category posted a 4.9% annual increase in prices in September year-over-year.     
 

Regionally, menu prices grew strongly over the two-month period in the West (0.7%), Midwest (0.5%), and South (0.4%), with prices in the Northeast (0.1%) increasing just marginally. Over the past 12 months, the West (3.9%) and Midwest (3.8%) experienced the fastest menu price growth, with the South (3.6%) and Northeast (3.4%) still rising solidly but more slowly.