Grocery Inflation Steady in May
Inflation is more or less steady, according to the latest Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics (BLS). On the more side, both the overall CPI and the food-at-home CPI rose a scant 0.1% in May. On the less side, prices across several grocery indexes decreased last month.
The slight elevation in food-at-home prices follows a 0.2% decline the previous month, underscoring the wobbly nature of inflation that’s marked much of the past year. Within the grocery sector, fruits and vegetables for at-home consumption rose 1.3% and nonalcoholic beverages went up by 0.7%. The price of lettuce alone climbed 5.3% in May.
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During the same period, the CPI for meats, poultry, fish and eggs continued a downward trend, posting a 1.2% decrease. The price of eggs – which spiked earlier this year – dropped 13.8% for the largest decreased in that index since 1951, BLS reported. Inflation for dairy and related products softened as well, coming in 1.1% lower during May. The CPI for cereals and bakery stayed the same.
As far as inflation goes, grocery is faring a tad better than foodservice as an industry. Data from BLS revealed a 0.5% increase in the index for food away from home in May. The CPI for full-service meals edged 0.4% higher and the index for limited service meals also went up, to the tune of 0.5%.
For retailers that sell apparel, prices are continuing a moderate uptick. For the third month in a row, the index for clothing rose 0.3%.
While inflation is coming off the record highs of 2022, food costs remain above normal levels for American consumers. The CPI for food at home is 5.8% higher on a yearly basis, which is above the overall CPI rate of 4%.
Andy Harig, VP, tax, trade, sustainability and policty development for FMI - The Food Industry Association, said that the industry has become adept at dealing with monthly changes. “The May CPI report reveals grocery prices continue to level off, with food price inflation relatively flat since February and significantly lower than the July 2022 peak. Particularly heartening is the number of items in grocery store aisles with declining prices, including eggs, cereals, meat and dairy," he observed, adding, “We understand from our U.S. Grocery Shopper Trends research that consumers remain concerned about prices at the grocery store. The cost of food can be impacted by a number of factors – including unexpected events – but we remain optimistic that food inflation will continue to moderate throughout 2023."
The Federal Reserve will take the May inflation results into account as the group meets this week to weigh another hike in the benchmark interest rate. The Fed will announce its decision on June 14.
