The 2007-2009 recession was the longest period of economic decline since the Great Depression of the 1930s. Faced with falling incomes and economic uncertainty, many Americans economized on their food purchases in 2007-2009. The decrease in aggregate food spending by all U.S. households during the recession, which officially began in December 2007 and ended in June 2009, represents the largest inflation-adjusted drop recorded by the Bureau of Labor Statistics’ “Consumer Expenditure Survey” since the survey began in 1984.
A salient feature of the recent recession was a significant and sustained increase in unemployment. National unemployment averaged 9.3% in 2009, up from 4.6% in 2006. Real (inflation-adjusted) average household income fell from $60,533 in 2006 to $59,067 in 2009 (in 2006 dollars). In addition, food prices increased substantially during the early part of the recession. Food prices peaked in 2008, when the annual rate of food price inflation was 5.5%. Even though food prices started to decline in February 2009, the average annual growth rate was still almost 3.8% between 2007-2009. This double-squeeze of lower incomes and higher food prices put pressure on consumer expenditures.