Nothing beats a home-cooked meal. But affording one is getting harder by the month.
The consumer price index (CPI) rose 1.0% in May to a year-over-year high of 8.6%, reflecting the inflationary tension that has characterized 2022. Not surprisingly, energy commodities increased, with gasoline prices leading the way with a 4.1% hike, according to the U.S. Bureau of Labor Statistics (BLS). Record increases in grocery price inflation in April were followed by more record increases in May.
Prior to today’s results, most media outlets had an expected consumer price index growth of 0.7% from April, more than double the gain in the prior month. The increase in inflation over the past year, meanwhile, was forecasted to stay near a 40-year high of 8.4%.
The U.S. Bureau of Labor Statistics reports that the consumer price index for food at home swelled 11.9% year-over-year (unadjusted) for May 2022. This is the largest 12-month index increase since April 1979.
Seasonally adjusted monthly increases in the food-at-home index have been sharp so far in 2022 and show no signs of relenting. After a slight 0.4% dip to close out 2021 in December, the past three months have seen indexes of 1.5% in March, a relatively optimistic 1.0% rise in April, and today’s report showed a 1.4% hike in May.
The BLS noted that all six major grocery store food group indices experienced price hikes for May. The largest gain came in the dairy and related products index, which rose 2.9% month-to-month (its largest monthly increase since July 2007), followed by non-alcoholic beverages (+1.7%), other food at home (+1.6%) and cereals and bakery products (+1.5%).
Since May 2021, the food-at-home index for meats, poultry, fish and eggs climbed 14.2%, with beef and veal up 10.2%, pork showing a 13.3% raise, chicken up 17.4% and the eggs index up a whopping 32%. With very few exceptions, BLS data shows most of the major grocery store food group indexes rose over the past year.
Indexes for everyday popular items like bacon, breakfast sausage and related products (+0.3%), bread (+0.5%) and milk (+2.8%) all increased from April to May and rose 15.6, 8.7 and 15.9 respectively in unadjusted percentage changes over the past 12 months.
In contrast, the food away from home index expanded by 7.4% from May 2021, which is its largest increase since November 1981. May’s 0.7% increase held close to April’s 0.6% change and the full-service meals index saw a 0.8% increase from April.
Experts were close but a tad conservative in their analyses overall for the May CPI. While many thought April’s numbers were a step in the right direction to a slow steadying of inflation and consumer prices, the data seems to have fueled misplaced optimism. If there was any doubt as to whether the Federal Reserve will be raising interest rates by 0.5% at the next Federal Open Market Committee meeting on June 14-15, May’s CPI stats confirm it.
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