Where Did Inflation Land in June?
Inflation, while still elevated over normal levels and a topic of both everyday conversations and political volleys, continues to stabilize this summer. The latest data from the U.S. Bureau of Labor Statistics (BLS) shows that overall inflation fell for the first time since May 2020, declining a scant but meaningful 0.1% in June.
There was little change in the grocery sector last month. The CPI for food at home did go up, reversing four months of flat or declining price hikes, but here, too, the rate was a slight 0.1%. Grocery inflation is up 1.1% on a year-over-year (YoY) basis.
[RELATED: Food Retailers Get Real About Investments, Outlook]
The small gain in the grocery index in June was driven by a 0.6% bump in the dairy and related product segment led by a 2.4% increase in butter and margarine prices. The index for meats, poultry, fish and eggs went up by 0.2%, while the CPI for nonalcoholic beverages edged 0.1% higher and the “other” food at home index rose 0.5%.
The CPI for other grocery indexes dropped in the opening month of summer. Fruit and vegetable prices dipped 0.5% and cereal and bakery items went down 0.1%, per BLS data.
Meanwhile, above-average prices continue to dog the foodservice industry, as the food-away-from-home CPI rose 0.4% last month, the same pace as the prior month. The index for full-service meals increased 0.6% during that period.
Andy Harig, VP tax, trade, sustainability and policy development at FMI - The Food Industry Association reiterated the important role of food retailers to price-conscious shoppers. “Today’s CPI numbers once again demonstrate that eating at home is the most cost-effective strategy for American consumers looking to manage their food budgets. And this is not a new phenomenon – the latest data from the U.S. Department of Agriculture demonstrates that this has been the case for the last decade,” he said, adding, “The path to bringing down inflation continues to be somewhat uneven, as certain grocery categories witnessed moderate increases last month. Other staples like fruits and vegetables as well as cereals and bakery products declined in June. But food-at-home continues to run well below the overall and ‘core’ inflation rates."
Outside of food, there was relief at the pump as road trip season kicked off. Of note to retailers with fuel stations, the CPI for gasoline declined 3.8% last month following a similar 3.6% decrease in May.
