Grocery price inflation hits another 43-year high in August

Grocery prices are showing no signs of slowing amid still-soaring inflation rates. 

Consumers paid higher prices for everything from cereal to eggs last month, sending retail food price inflation up 0.7% in August and 13.5% year over year, the U.S. Bureau of Labor Statistics said on Tuesday.

The 13.5% increase was the highest rate for that number since March 1979, the latest in a string of four-decade highs for retail food price inflation.

Prices are up for basically everything. Over the past year, the price for breakfast cereal rose 23% and eggs increased nearly 40%.

Meat prices seem relatively tame by comparison. Meats, poultry and fish prices are up 8.8% over the past year. But poultry prices rose 15.9% as chicken and turkey producers continue working their way through a springtime rash of Bird Flu.

Driving much of the increase in grocery prices has been retailers’ own rising costs for labor and food. Wage rates have soared amid historic shortages of labor, while those same labor concerns have helped drive up the cost of many food products. The war in Ukraine and other issues, such as a shortage of truck drivers, have also contributed to the problem.

Overall, food costs for consumers rose 11.4% over the past 12 months in August, the highest rate since 1979.

Prices at restaurants and foodservice operators increased 0.9% in August. Prices are up 8% over the past year as operators increased charges to consumers to offset their own cost increases for wages and food.

Much of that acceleration is due to sharply higher prices at school lunch programs, where many states ended free meals to students. Prices at schools and employee sites are up 23.7% over the past year.

But both full-service and limited-service restaurants continue to raise prices. Full-service restaurants increased prices 0.8% last month, higher than the 0.6% increase the month before. Limited-service restaurants increased prices 0.7%, down from the 0.8% they increased prices in July.

For the full year, full-service restaurants have increased menu prices 9%. Limited service restaurants increased charges 7.2%.

Overall, inflation rose 0.1% in August. But on an annual basis, the consumer price index slowed to 8.3% from 8.5% the previous month. Lower gas prices drove much of that slowdown.