US food and soft drinks inflation eased again in May, although prices of cereal and bakery products are still more than 10% higher than a year earlier.
Consumer prices of food and non-alcoholic drinks rose 6.7% in the 12 months through May, continuing the slowing trend from a peak of 11.4% reached in August, the US Bureau of Labor Statistics reported.
Last month’s rate, which includes in-home consumption and eating out costs, compares to 7.7% in April, 8.5% in March and 9.5% in February.
On an annualised basis, the food-at-home index rose 5.8%, with cereal and bakery products leading the increase, up 10.7%. Non-alcoholic beverages were 8.7% higher than a year earlier and dairy products 4.6%.
The price of fruit and vegetables climbed 2.7%, with meat, poultry and fish up 0.4%.
Andy Harig, vice president for tax, trade, sustainability and policy development at trade body The Food Industry Association, said the industry representative is “optimistic that food inflation will continue to moderate throughout 2023”.
He added: “While we are heading in the right direction, grocers still face headwinds in terms of labour shortages and transportation challenges, and we anticipate that prices will likely remain above pre-pandemic levels for much of the year.”
A measure for food prices consumed away from home was 8.3% higher than in May last year, down a touch from 8.6% in the previous month
For US inflation as a whole, the Bureau’s all-items index of consumer prices rose 4% in the 12 months through May, the smallest increase since March 2021, and down from April’s 4.9% rate. Prices edged up 0.1% on a monthly basis, slowing from a 0.4% pace in April.
The US Federal Reserve kicked off its two-day monetary policy meeting yesterday (13 May). The consensus is the benchmark Fed Funds Rate will be paused at a target range of 5-5.25% when it announces the decision today after a run of ten increases.
Breaking down consumer prices on a monthly basis, food and soft drinks rose 0.2% in May, compared with flat rates in April and March. Food consumed in the home increased 0.1% following a 0.2% dip in April. The food away from home index climbed 0.5%.
