The drumbeat of concern about inflation seems well founded, given news from the United States Bureau of Labor Statistics that the pace of inflation is now at a 13-year high, a level not seen since the Great Recession.
Strong pent-up demand helped spur higher prices across many sectors, from previously owned cars to clothing to food. The overall consumer price index (CPI) jumped 5% year over year and 0.6% from the previous month, a higher-than-anticipated increase.
Within the food sector, the general CPI for food at home rose 0.4% from April to May and 0.7% from May 2020 to May 2021. That contrasts with food away from home, which climbed 0.6% from the previous month and 4% from the prior year, mostly attributable to the return to restaurant dining and pressure on wages and labor.
The Labor Department report also shows that the major grocery store food group indexes rose in both April and May, with last month’s increase linked to higher indexes for meats, poultry, fish and eggs. Indexes also edged up in the cereal, bakery dairy and fresh vegetable categories and declined somewhat in nonalcoholic beverages and fresh fruits.
According to the U.S. Department of Agriculture’s Economic Research Service (ERS), food-at-home prices are expected to increase between 1.5 and 2.5% for the year. Still, the ERS notes in its summary findings, inflation for most food categories is expected to be at or below the 20-year historic average, except for nonalcoholic beverages and fresh fruit.