Food Prices Continue Familiar Pattern of Volatility
After a 0.4% drop in April, grocery inflation ticked up again 0.3% in May. On a year-over-year (YoY) basis, food-at-home prices are up 2.2%, according to the latest Consumer Price Index data from the U.S. Bureau of Labor Statistics (BLS). The overall CPI edged a scant 0.1% higher last month after a 0.2% bump in April.
It was a split month for grocery categories in May, as three of the six major indexes rose and three declined. The CPI for cereals and bakery products increased 1.1%, the “other” food at home segment moved 0.7% higher and fruits and vegetables index went up 0.3%. The index for meats, poultry, fish and eggs dropped 0.4%, with egg prices sliding back down by 2.7%, while the nonalcoholic beverages index dipped 0.3% and the CPI for dairy and related products decreased a slight 0.1% in that time frame.
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In other segments, the competitive food-away-from home market isn’t out of the inflation woods yet either, climbing an equal 0.3% in May. Shoppers who gas up at retailers with adjacent fuel stations got some relief, as the gasoline index declined in May by 2.6% even as Memorial Day travel ramped up.
“After cooling in the month of April, the CPI numbers released today demonstrate continued – albeit mild – volatility,” said Andy Harig, VP of tax, trade, sustainability and policy development at FMI – The Food Industry Association, adding that the market is still adjusting to frequently-changing trade issues.
He continued, “The impact of tariffs on food prices remains muted but continues to be a factor worth watching. The increase in steel and aluminum tariffs announced earlier this month may impact packaging costs for food items like canned vegetables and beverages as well as capital costs like store construction and heavy equipment. Nevertheless, we are hopeful that trade deals will be reached that minimize the impact of tariffs in the coming months.”
