The July Consumer Price Index was released on the morning of Aug. 10, containing mostly favorable results. The good news: As many economists predicted, inflation appears to be easing on most goods and commodities. The bad news is, that doesn’t include food.
The cost of energy, used cars, apparel and communication all saw nominal increases (some even noting decreases, as in the case of fuel). Yet, food overall rose 1.1% from June. And in the case of food at home, aka groceries, that rose 1.3%. With the latest findings, this marks the seventh consecutive month where the CPI on food increased by at least 0.9%.
The uptick marks a massive 10.9% increase in the overall food category since this time last year, with the Bureau of Labor Statistics noting that it’s the most significant increase over 12 months since May 1979.
Also notable, there were equal increases across all six of the major grocery store food group indexes. The biggest jump was for nonalcoholic beverages, which rose 2.3% — setting it off the most was the increase in the cost of coffee, up 3.5%. Among the other categories, cereal and bakery goods are up 1.8%, dairy products are up 1.7% and meats, poultry, fish and eggs jumped 0.5% (even after going on the decline in June). The cost of fresh fruits and veggies are also up 0.5%, while the “other” category increased by 1.8%.
Little Respite for Those Choosing to Eat at Home
When analyzed over the course of 12 months, the food at home index is one of the sharpest increases, with consumers now paying 13.1% more for the cost of groceries today. Similar to the overall food category, that’s also the highest adjustment since 1979. Breaking it down further, the figure includes a 15% increase in the cost of cereal and baked goods, a 14.9% jump for dairy and related products and a 9.3% rise in the cost of produce since July 2021.
While gasoline and supply chain issues are helping to ease the other Consumer Price Index line items, food has been subjected to other unpredictable cause and effect cycles. In fact, USA Today notes that the Federal Reserve — which adjusts interest rates based on data like the CPI — doesn’t consider food jumps when assessing their next move.
Rather, the article notes, they “prefer looking at the core inflation rate because energy and food price spikes can distort general trends since they can be affected by short-term shocks like bad weather ravaging a year’s crops.”
Even so, while the latest CPI shows the U.S. may be moving further away from a much-debated recession, consumers, at least for now, will still have to pay more at the grocery store — especially those that live in certain areas. According to Bloomberg, June’s increases were hardest on residents of New York City (11.3% increase in produce), San Francisco (8.7% increase in dairy) and Atlanta (10% increase for baked goods and cereal).
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