Eating Out Continues to Get More Expensive as Prices of Grains, Vegetables and Dairy Rise Finds July Consumer Price Index

Group of people in cafe outdoors, woman eating pizza outdoors in pizzeria.
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As expected, the U.S. inflation rate for July cooled moderately, partly due to lower energy prices, according to the latest U.S. Bureau of Labor Statistics (BLS) report released Aug. 10.

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After rising 1.3% in June, the overall Consumer Price Index (CPI) held firm from June to July 2022 on a seasonally adjusted basis. The all items unadjusted index rose 8.5% last month on a year-over-year basis, down from the 9.1% rate reported for June 2022. The core CPI (all items less food and energy) remained steady at 5.9% over the past 12 months. As Yahoo Finance stated, analysts like FactSet estimated an overall index of 8.7% and a core of 6.1%.

Food Remains Expensive Despite Flattening Price Hikes More Broadly

Despite the encouraging signs of an overall lower inflation rate and recent price declines concerning gasoline and fuel oil, some indexes remained high, like food. The overall food CPI increased 10.9% over the last year. This marks the biggest 12-month surge since the index period ending May 1979.

The food away from home index rose 0.7% in July, down slightly from the 0.9% increase in June. The index for full service meals climbed 0.6% from June to July, and the limited service meals index grew 0.8% for the month.

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Year-over-year, the index for food away from home advanced 7.6% over 2021. Full service meals and limited service meals over the last 12 months increased 8.9% and 7.2%, respectively.  

Higher costs for eating out every month means restaurants, eating facilities and food delivery services have to raise their prices to cover food and labor costs.

Staple Foods, Especially Eggs, Continue Upward Price Trend

Prices for staples like cereals, vegetables and dairy continue to surge, according to the BLS report. Flour, cereals and non-white bread, all dairy products, and processed fruits and vegetables have seen significant increases in 2022 — and all have seen double-digit percentage price hikes year-over-year. Eggs, as an example, are up a whopping 38.0% since July 2021.

The U.S. Department of Agriculture’s Economic Research Service says that the trend to eat outside the home accelerated during the 1970s and now “plays an increasingly large role in the diets of U.S. consumers.” With food and labor costs so steep, you might think restaurants would be pricing customers out, but the opposite its true.

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According to Bloomberg, despite increased costs, people are taking advantage of doing things they couldn’t during the pandemic — like eating out. While spending on groceries was down 11.7% in the second quarter of 2022, consumer spending on food services and accommodations were up 13.5%, per Bloomberg’s gross domestic product analysis.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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