Grocery product inflation crept up 0.5% on a seasonally adjusted basis in November, representing a slight slowdown from October’s monthly increase of 0.6%, but ahead of 0.1% inflation for all items, according to Consumer Price Index data released on Tuesday.
The food-at-home price increase was driven by increases in four of the six major grocery store food group indexes: fruits and vegetables (up 1.4%); cereals and bakery products (up 1.1%); dairy and related products (up 1%), and nonalcoholic beverages (up 0.7%).
The index for meats, poultry, fish, and eggs fell 0.2% in November, including a decline of 0.8% for beef prices and a 0.3% decline for pork, and the index for other food at home fell 0.1%.
“Food inflation has slowed last month, providing much-needed relief for millions of families at the grocery store,” President Biden said in remarks to reporters. “This is welcome news for families across the country as they get ready for the holiday celebrations and for family dinners.”
The CPI, released by the U.S. Bureau of Labor Statistics, showed that the cost of groceries remains up in double digits compared with a year ago, however.
The food at home index was up by 12% year-aver-year in November, led by two major groups: cereals and bakery products, and dairy and related products, as both categories posted an increase of 16.4%, year-over-year.
The index for meats, poultry, fish, and eggs was a mixed bag. Egg prices remaioned elevated, up 49.1%, year-over-year, following monthly increases of 10.1% in October and 2.3% in November.
Among meat categories:
• Beef and veal prices were down 5.2% year over year
• Pork was up 1.2% for the full year
• Poultry was up 13.1% year-over-year
Fruit and vegetable prices rose 9.7% for the full year, with a 19.8% gain in lettuce and a 16.2% increase in potatoes. Canned and frozen vegetable prices also rose in double digits.
Non-alcoholic beverage prices were up 13.2% year-over-year, and other food at home rose 13.9%
Including an 8.5% increase in food away from home (restaurant) inflation, total food was up 10.6% in November, compared to November 2021. The CPI for all items rose an unadjusted 7.1% year-over year.
The results come as consumers continue to scale back their expectations for inflation in the year ahead. Last week, the University of Michigan reported that consumers now expect overall inflation of 4.6% in the year ahead, down from previous projections of 4.9%, and the lowest reading in the last 15 months.
Declines in near-term inflation expectations were “visible across the distribution of age, income, education, as well as political party identification,” the report concluded, adding that long-run inflation expectations remain around 3%.
In recent earnings calls, food retail and wholesale executives have also suggested that they see signs of inflation moderating in 2023.
In its most recent Food Price Outlook report, the USDA said it expected food prices to grow more slowly in 2023 than in 2022. It projected all food prices would increase between 3% and 4%, including food-at-home price increases of between 2.5% and 3.5%, and food-away-from-home increases of 4% to 5%.
