Grocery Prices Tick Back Up in Latest Inflation Report

Average grocery prices rose slightly last month, according to the latest consumer price index, reversing a months-long trend of steady or falling prices.

Overall, food prices — which includes both food at home (groceries) and restaurant purchases — increased 0.2% from May to June, according to the CPI report released July 11 from the Bureau of Labor Statistics. The CPI, which serves as a proxy for inflation, measures changes in average costs of items in a given period.

The report shows food prices are 2.2% higher than they were 12 months ago. By comparison, prices rose 5.7% over the previous one-year period in 2023. While inflation isn’t rising as fast as it once was, food still feels expensive. In fact, food prices have risen 26% since the start of 2020.

Here are the broad strokes on food prices found in the latest report:

Groceries: The index for food at home is 1.1% higher year-over-year. From May to June, grocery costs increased 0.1%.

Dining out: Restaurant patrons are still paying more (4.1%) for food than they did a year ago. And the price index rose 0.4% from May to June. Specifically:

• Limited service meals (takeout only) cost 0.2% more in June and 4.3% more compared to the same time last year.
• Full-service meals (at sit-down restaurants) cost 0.6% more in June and 3.9% more year-over-year.

How inflation is hitting your grocery bill

Though grocery prices ticked up slightly in June, they continue to be a bright spot in the CPI. On the whole, they haven’t changed for three out of the past four months. In April, they declined slightly. That’s having a direct impact on people’s wallets: In May, several major retailers like Target and Walgreens touted summer discounts on pantry staples, seasonal favorites and other items.

But grocery prices don’t move uniformly. While they might be falling in one category or food group, they’re likely rising in another. This month was no different.

In June, average prices rose for eggs, baby food and formula, fats and oils and milk. They fell for fresh vegetables, fresh fruits and pork.

Egg prices have experienced huge swings since 2022, due to an avian flu. After two months of falling prices, the egg index rose 3.5% in June — the most of all the food categories analyzed by NerdWallet. Egg prices are 10.2% higher than they were a year ago.

The latest CPI release shows beef prices are on the rise again. In June, beef and veal cost 0.1% more than the previous month. That’s after prices fell 0.3% from April to May. Beef prices are 5.1% higher than they were a year ago.
 

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