Food Inflation Set To Surge: Economist Warns How Bad It Could Get | Michael Madowitz

Job growth flatlined through 2025

Federal Reserve officials including Jerome Powell and Christopher Waller confirmed that net job growth for 2025 was effectively zero when accounting for recent downward revisions and seasonal adjustments.

Recent payroll data shows cooling trend

The latest report showed the economy losing 92,000 jobs with unemployment ticking up 0.1%, signaling a 'yellow light' for the economy rather than a recession 'code red.'

Immigration restrictions constraining labor supply

Madowitz identifies recent immigration policies as the most disruptive in generations, creating downward pressure on growth and upward pressure on inflation as older workers retire without sufficient replacements.

Diesel prices surge $1.34 in one month

Diesel has jumped to nearly $5 per gallon according to AAA, significantly outpacing gasoline increases and directly threatening costs across the agricultural and trucking sectors.

Food prices face lagged pressure from fuel costs

While gasoline affects consumers immediately, diesel drives tractor fuel and shipping costs, meaning current spikes will transmit to grocery bills with a multi-week delay atop already forecasted 2.5% food-at-home inflation for 2026.

Fertilizer production vulnerable to Gulf disruptions

Agricultural supply chains face additional risk because fertilizer production relies heavily on natural gas exports from the Gulf region, where refining capacity is concentrated and exposed to geopolitical shocks.

Economy lacks buffer to absorb oil shock

The economy entered this crisis with already weak momentum—flatlining growth and moderate inflation creep—leaving little room to weather supply disruptions that historically caused six of the seven recessions before 2010.

Record oil production fails to insulate consumers

Despite the U.S. producing more oil than ever, consumer prices remain tethered to global markets and refining bottlenecks, meaning domestic production volumes do not protect households from pump price volatility.

Deficit and interest rate dynamics pose fiscal risk

With the federal deficit widening to roughly $1.7 trillion and interest rates stabilizing at higher levels than the pre-crisis era, growing debt service costs constrain fiscal flexibility to respond to economic shocks.