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Retail Food Prices Inch Ahead in June, but Basket Mixed
The largest monthly increase in cereals and baking products in nearly 3 years pace gains. The largest monthly increase in cereals and baking products in nearly 3 years pace gains, while eggs, pork and veggies dip; PPI suggests pace could slow.
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Photo by WGB staff, chart courtesy of Bureau of Labor Statistics
Prices for food in U.S. grocery stores ticked up slightly in June behind increases for some packaged goods, new figures from the Bureau of Labor Statistics indicate.
The bureau’s Consumer Price Index for food-at-home, a proxy for U.S. supermarket inflation, showed overall prices increased by 0.2% in the period, following deflationary conditions in May, when the index declined by 0.2%. On a year-over-year basis, the index shows grocery prices are up by 0.4% from the same period last year.
12-month percentage change for Food-at-Home Consumer Price Index
Five of the six major grocery categories showed price increases in June, led by a 0.6% gain in the index for cereal and bakery products—that category’s largest gain since October 2015. However, proteins—particularly eggs and pork—and fresh vegetables saw prices dip during the month, making June a mixed bag for food retailers counting on inflation to improve sales.
In addition, Producer Price Index figures, announced earlier this week, show that input costs in several categories fell sharply in June, indicating the current inflation may not sustain its momentum. Retail prices typically lag input costs by several months.
The CPI for fruits and vegetables increased by 0.5% in June, with the index for fresh fruits rising 1.6%, while the fresh vegetables index fell by 0.3%. The nonalcohol beverages index increased 0.3% in June, and the index for other food at home rose by 0.1%.
The index for meats, poultry, fish and eggs declined in June, falling 0.6%. The decline largely reflected a 7.1% decrease in the eggs index. The index for pork also declined, while the indexes for beef and poultry increased.
In the past 12 months, five of the six major grocery store food group indexes rose, although meats, poultry, fish and eggs (up 1.2%) was the only one to increase more than 0.5%. The index for nonalcohol beverages was the only one to decline over the year, falling 0.5%.
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