Inflation appears to be cooling, but grocery prices remain high

Overall inflation climbed 7.1% year-over-year in November, while food-at-home prices remain up 12%, according to Consumer Price Index data released Tuesday by the Bureau of Labor Statistics (BLS).

The numbers came in below the predictions of many economists for the second month in a row, signaling that inflation could potentially be slowing.

In November, the overall CPI rose 0.1%, while the food-at-home index climbed 0.5%. That’s up slightly from October’s 0.4% increase in the grocery price index but far lower than the 1.4% increase reported in May.

Four of the six major grocery store food group indexes increased over the month, the BLS reported.

Fresh produce prices saw the biggest increases, with the index for fruits and vegetables climbing 1.4% in November after falling 0.9% the month before.

The index for meats, poultry, fish and eggs, however, fell 0.2% in November after jumping 0.6% in October. The beef index dropped 0.8% during November.

The index for cereals and bakery products increased 1.1% last month, while the dairy and related products index rose 1%. Both of those categories have seen prices increase a whopping 16.4% over the year, the BLS said.

The nonalcoholic beverages index jumped 0.7% in November, after rising 0.5% in October.

The overall food-at-home index has soared 12% over the last 12 months, outpacing restaurant prices, which increased 8.5% during the same period.

November, of course, is Thanksgiving month. And this year, consumers paid much more for the feast then they had in years past, building on a double-digit increase in 2021. The American Farm Bureau Federation estimated the average cost of a Thanksgiving meal for 10 people was $64.05, up $10.74 from the year before.

“IRI anticipates consumers will continue their trading down behavior over the December holidays and into the new year,” Krishnakumar Davey, the research firm’s president of Thought Leadership for CPG and Retail, said in a statement earlier this month. “However, in some segments, consumers will splurge to celebrate the holidays. Retailers and manufacturers with an in-depth understanding of consumer strategies have an excellent opportunity to build loyalty by offering products, price points and package sizes that provide good value.”