LIVE MARKETS-The inflationary life of pets

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THE INFLATIONARY LIFE OF PETS

With inflation counting among the market's top concerns these days, David Michael Tinsley, senior economist at Bank of America Institute, illustrated the issue by highlighting a very narrow area of interest - the price of keeping a pet.

In a research piece titled "Best In show: U.S. pet ownership" Tinsley gets the important statistics out of the way first noting that nearly 94 million U.S. households include at least one pet. Dogs are the most popular, residing in more than 90 million U.S. homes. However, cats appear to be our next best friend with well over 60 million households including a feline.

And LJ and Luna remind us that some houses have both.

Bear that in mind when Tinsley cites Bureau of Labor Statistics (BLS) consumer price data showing that the price of pet food and pet services rose sharply over the last five years.

On the positive side, pet food inflation had dropped to near zero in April 2025, but prices for pet services (including vets) remained relatively high with pet services inflation above 4% in the latest reading.

But according to Bank of America credit and debit card spending data, spending growth at pet stores and direct vet spending is running below these inflation rates.

"In our view, households may be economizing on pet food by 'trading down' or shopping at the grocery store, while the growth in pet insurance may be mitigating vet spending," Tinsley wrote. And he notes that the share of spending has fallen most among lower-income Millennials vs May 2018-April 2019.

"It could be that, when faced with other cost pressures (such as rising car insurance and utility bills), these younger lower-income households are looking for savings on their pet spending," Tinsley said.

On a regional basis, he writes that Seattle and San Francisco spent more on their pets in the first four months of the year than the U.S. average with Seattle's average monthly spend on pets coming in 30% above the national average, and San Francisco-Oakland and Berkeley a very close second.

Meanwhile, cities in the south have below-average spending with San Antonio, Texas spending almost 20% less than the national average.

"We doubt Southerners love their four-legged friends less," said Tinsley adding that "these differences likely reflect the general costs of living across the country."

With all that said, the water may be muddied for a certain kid's ambitions to add a pet frog to his household.

(Sinéad Carew, Chuck Mikolajczak)

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