🍕 Food-flation

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Tonight: Your grocery bill isn't getting any relief soon. Plus: So much Fox-Dominion drama. Let's get into it.

By Allison Morrow

🍳 HANGRY

In the three years since the pandemic took hold in the United States, the economy has whipsawed in ways that academics are still trying to understand. But grocery prices have been on a relentless hike — and the peak may still be miles away, my colleague Danielle Wiener-Bronner writes.

Here's the deal: Even though ingredients have gotten cheaper over the past year, food producers aren't budging. The reason: Meh, why would they?

To be sure, food manufacturers have to factor in costs of labor and transportation, which remain elevated compared with a few years ago. But at the end of the day, they're not lowering prices because they don't need to. Because, surprise, they make more money that way.

When inflation soars the way it has since 2021, it's not unusual for big corporations of all stripes to use the moment.

"Companies view these as occasional opportunities, and they don't want to miss out," Jean-Pierre Dubé, a marketing professor at the University of Chicago Booth School of Business, told Danielle.

Between 2022 and 2023, groceries got 11.3% more expensive, for a variety of reasons. Take eggs, for instance.

The price we pay at the store for eggs went up nearly 140% between 2021 and 2022, then another 70% last year, thanks to a devastating avian flu, higher feed and transportation costs, and — not least — producers jacking up prices to lock in profits. (The price surge is so, um, egg-regious that lawmakers are calling for an investigation into possible price-gouging. Fowl play, you might say? (I'm sorry.))

Anyway, it isn't just food companies taking advantage of the inflationary moment to raise prices. But food is where most Americans feel the pain, because while you might forgo a new couch or car or dishwasher, everyone has to eat.

Many food companies are forecasting that they might slow down or pause price increases — but not lower them, Danielle explains. That's because pricing is "sticky." We get used to paying more, and over time we hardly notice it.

"There have been supply chain pressures, and there have been commodity cost increases. But [companies] have, I think, taken price increases that exceed that," said Mark Lang, an associate professor at the University of Tampa who specializes in food marketing. "They are, to me, absolutely profit-taking."

Companies are maintaining elevated prices, or continuing to increase them, at a time when many Americans are already struggling to pay for food, especially as pandemic-era food stamp benefits expire.

"This kind of activity, in a big picture way, reduces the standard of living for the country," said Lang.

Will prices ever come down?

Eventually, yes ... A bit.

Some items, like lettuce and tomatoes have already gotten less expensive in the grocery store, says Tom Bailey, a senior consumer foods analyst at Rabobank. (Great news for Americans, who famously love salad...)

Bailey added that if and when companies moderate pricing, they'll have to do it carefully.

"If you start dropping prices, it can undermine the value proposition that brands and manufacturers have built up over the years with their consumers," he said. Lower prices could, for example, make people think food quality has gone down — or make them think they were paying too much in the first place. (Because, of course, they were.)

NUMBER OF THE DAY

10.8 million

The number of job openings in the United States fell to 10.8 million in January, down from 11.2 million in December. That signals a very slight chill in the labor market, which is still running too hot for the Fed's comfort.

That figure, part of the closely watched Job Opening and Labor Turnover Survey, came slightly higher than economists had expected.

The data came out just as Fed Chairman Jay Powell began his second day of congressional testimony, in which he underscored the Fed's view that interest rates will likely have to stay higher for longer to tame inflation.

🦊 DOMINION DRAMA

The news business has never been a particularly glamorous one, as any young journalist discovers the moment she steps into her first cluttered, coffee-stained, dimly lit newsroom.

But over at Fox News, we're learning about some downright dirty work playing out among executives and on-air personalities. The kinda stuff that obligates me to put the word "news" in quotation marks.

As part of Dominion Voting Systems' $1.6 billion lawsuit against the right-wing channel, hundreds of pages of text messages, emails, and other material were made public Tuesday night. The documents put in black-and-white what many media analysts have long suspected: That Fox executives and hosts knew full-well that the pro-Trump conspiracies they advanced on air were bogus, but they kept the stories going because they drove ratings.

The Dominion lawsuit is one of two separate cases brought by voting technology companies against Fox News that collectively seek $4.3 billion in damages, posing a serious threat to the highly profitable arm of Rupert Murdoch's media empire.

The election lies "transformed Dominion into a household name" and caused "irreparable economic harm," Dominion argues in its lawsuit.

Fox News has denied the claims.

Here are some of the highlights from the most recent trove of documents to be made public, as reported by my colleague Oliver Darcy:

Tucker Carlson "passionately" hates Trump.

The prime time host repeatedly expressed his disdain for Trump in private communications. In one conversation, two days before the January 6 attack, Carlson says: "We are very, very close to being able to ignore Trump most nights. I truly can't wait ... I hate him passionately."

Rupert Murdoch, Fox's chairman, rejected conspiracies about Dominion Voting Systems being manipulated to sway the 2020 election.

In his January deposition, Murdoch was repeatedly asked about various electronic voting conspiracy theories — and he rejected all of them. "You've never believed that Dominion was involved in an effort to delegitimize and destroy votes for Donald Trump, correct?" a Dominion lawyer asked at one point. "I'm open to persuasion; but, no, I've never seen it," Murdoch replied.

Top hosts probably "went too far."

In an email to Fox News chief executive Suzanne Scott, Murdoch conceded that some of the network's hosts probably crossed the line in the aftermath of the 2020 election. "Maybe Sean [Hannity] and Laura [Ingraham] went too far," Murdoch wrote Scott, in an apparent reference to election denialism after Trump's loss.

Sean Hannity and Steve Doocy mocked Fox's journalists.

In a series of November 2020 text messages, Hannity and Doocy attacked the reporting from their colleagues on the "straight news" side of the network.

Hannity: 'News' destroyed us.

Doocy: Every day.

Hannity: You don't piss off the base.

Doocy: They don't care. They are JOURNALISTS.

(Side note: I'm having a laugh imagining a conversation between myself and my boss where I argue we have to do another Taco Bell Mexican Pizza story to appease "the base" lol.)

Maria Bartiromo refused to call Biden "President-elect."

In text messages to Steve Bannon after the election had been called for Biden, Bartiromo said she wants "to see massive fraud exposed … I told my team we are not allowed to say pres elect at [all]. Not in scripts or in banners on air. Until this moves through the courts."

'Weak ratings makes good journalists do bad things.'

After the 2020 election, Fox News' then-DC managing editor Bill Sammon decried the network's coverage of false election claims in private messages to a colleague. "It's remarkable how weak ratings makes good journalists do bad things," Sammon wrote then-political editor Chris Stirewalt. Stirewalt replied: "It's a real mess."

Bottom line

It doesn't matter, legally, whether Fox News lied. Under American free speech laws, journalists are allowed to get it wrong. But Dominion's case hinges on the argument that Fox employees demonstrated a reckless disregard for the truth — that they knew the election fraud claims were false and promoted them anyway. The trove of documents released this week appear to be the strongest evidence yet of that behavior.

RELATED: The White House lashed out at Carlson in an extraordinary rebuke of the late-night commentator who has been airing false depictions of the January 6, 2021, attack this week.

WHAT ELSE IS GOING ON?

💸 Silvergate, a crypto-focused bank, is winding down operations and plans to liquidate.

🐦 Elon Musk apologized after publicly mocking a Twitter employee who was trying to find out whether he still had a job at the company. Separately, the Federal Trade Commission acknowledged a wide-ranging investigation into Twitter's privacy practices after a House subcommittee disclosed a dozen letters from the agency to the company seeking information about its operations under Musk.

🏡 The US housing market is short 6.5 million homes.

POST OF THE DAY