Inflation Inches Ahead, Led by Rising Prices for Fruit

Retail prices for grocery foods in January increased slightly from December and, on a year-over-year basis, marked its biggest increase since June 2015, led by increased prices for fresh foods, according to the latest findings from the Bureau of Labor Statistics.

The bureau’s Consumer Price Index (CPI) for food at home—a proxy for supermarket inflation—accelerated slightly to 1% from a 0.9% gain in December, but was up 3.5% as compared to last January. The latter figure represents the CPI’s fastest increase since June 2015 and should come as additional relief for supermarkets, which endured 19 months of food price deflation before inching up beginning last June. The January figures represent the seventh consecutive month the index has risen.

Inflation was primarily driven by increased prices for fresh fruits and vegetables, which were up by 3.5% from the same period a year ago; and by meat, poultry fish and eggs, which saw a 1.9% year-over-year price increase. Nonalcoholic beverages and other food at home were slightly inflationary, with each category showing a 0.4% year-over-year increase. Dairy prices were down by 0.9%, and cereals and bakery products also saw slight deflation in January, by 0.2%.

As compared to December, the food group indexes were mixed, with two rising, one falling and three unchanged, CPI figures showed. The index for fruits and vegetables rose 0.5%, reflecting a 1.9% increase in fresh fruits and a 1.2% decline in fresh vegetables. The index for cereals and bakery products increased by 0.3% from December.

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The index for meats, poultry, fish and eggs declined in January, falling 0.2% after rising in December. The indexes for dairy and related products, nonalcoholic beverages and other food at home were all unchanged in January.