Dive Brief:
- Food-at-home prices increased in June at a 4.7% annual clip, down from 5.8% during the month before, according to Consumer Price Index data released Wednesday by the U.S. Bureau of Labor Statistics.
- The food-at-home index held steady in June compared with May, compared with the 0.1% bump it posted last month
- Overall inflation declined in June to 3% — the slowest year-over-year rate since March 2021, when it came in at 2.6%.
Dive Insight:
The sharp drop in grocery inflation in June continues an unbroken string of declines that began last August when a run-up in the annual gauge of food-at-home prices that had lasted for more than a year finally hit its apex — a stunning rate of 13.5%.
At 4.7%, the year-over-year level for the food-at-home index in June represents the slowest rate of price increases for groceries since September 2021, when it was 4.5%. The index shot up that month by 1.5 percentage points over the level in August 2021 to hit 4.5%, kicking off an upward march that seized consumers’ attention and helped make supermarkets a symbol of the nation’s fierce battle with rising inflation.
In a sign of just how quickly grocery inflation has recently been declining on a year-over-year basis, the reduction in the food-at-home index in June represented the fifth consecutive month in which the economic measure shed more than a full percentage point.
Even as grocery inflation has broadly slowed, prices for some categories of goods were up sharply in June compared with the same period last year — a reminder that consumers are still dealing with higher bills for key goods even as the overall inflation picture stabilizes.
Prices for cereals and bakery products soared at an 8.8% annual rate in June, with flour and prepared flour mixes, bread and crackers leading the way with double-digit increases, the BLS reported. Prices for nonalcoholic beverages and drink ingredients rose at a brisk 7.6% pace.
Dairy and related product prices were up just 2.7% year-over-year in June, as milk prices declined 1.9%. Fresh produce prices rose 1.1%, with apple prices up 4.5%.
Meanwhile, the rate of inflation for the group that includes meats, poultry, fish and eggs swung to a decline of 0.2% in June after rising slightly in May. Egg prices, which grabbed headlines when they soared last year, were down 7.9%, while prices for bacon and related products fell 10.1%, according to the BLS.
