Grocery prices held steady in June, offering some relief

Grocery prices stayed steady in June after ticking up in May, offering some relief to shoppers. In that time, menu prices rose 0.4%, continuing a slight upward trend over the past few months.

Together, food prices rose 0.1% for the month, according to the latest Consumer Price Index, released Wednesday by the Bureau of Labor Statistics. That’s less of a hike than the increase for items overall, which rose 0.2% from May to June. Over the course of the year, however, food prices have risen more than overall inflation.

In the 12 months through June, food prices went up by 5.7%, while inflation grew by 3%. In that time, grocery store prices grew 4.7%, while menu prices went up by 7.7%.

The good news is that the rate of increase has been slowing: In May, food prices jumped 6.7% compared to the previous year, with grocery prices rising 5.8%, the BLS reported last month.

“We’ve seen a persistent slowing of grocery prices,” Jared Bernstein, chair of the Council of Economic Advisers, a group that advises the president, told CNN. The grocery increase in the year through June was the lowest annual increase since September 2021, he said. “With groceries in particular, I would say the trend is our friend.”

Still, some items notched large increases this year.

In the year through June, margarine jumped 13.1%, flour got 12.1% more expensive. Bread rose 11.5%. Sugar grew 11.1%. Carbonated drinks jumped 9.1% and ice cream went up 5.3%.

Grocery prices were flat in June.  

Other items saw more modest increases in that time. Ham jumped 4.7%. Uncooked beef steaks rose 4.3%, while uncooked ground beef grew 2.3%. Coffee rose 3.3% and together, fruits and vegetables went up 3%.

Not every item has become more expensive this year, however. Some have notched pretty large declines. Notably, egg prices, which were up dramatically about five months ago, were down 7.9% for the year.

Bacon prices dropped 10.1%, pork went down 3.8%, and hot dogs fell 3%. Milk went down 1.9%. Chicken ticked down 0.1%.

There are a number of factors that have contributed to rising food prices, including extreme weather, the war in Ukraine, avian flu and higher costs along the supply chain. Some food sellers have used the disruptions to raise prices while avoiding much pushback. And with food sales up — even though consumers are buying fewer items — those prices are likely to remain elevated.

Bernstein noted that real wages, which measure wages adjusted for inflation, have also gone up in this period. On average, real hourly earnings rose 1.2% in the year through June, the BLS said Wednesday.

“When we’re thinking about food prices … we shouldn’t think about them as divorced from the paycheck,” he said.

But for Americans relying on food benefits, that might not be much of a comfort. Kroger’s CEO recently noted that some shoppers have been cutting back as they receive less aid through the government’s Supplemental Nutrition Assistance Program, which offers food stamps. Earlier this year, pandemic-era increases to SNAP benefits ended, reducing the amount received by about 16 million American households.

How prices changed in June

From May to June, when grocery prices stayed flat, some specific items notched increases.

Uncooked ground beef went up by 1.6%, breakfast cereal rose 1.1%, chicken went up 0.6% and fruits and vegetables together rose 0.8%. Flour rose slightly, by 0.4%.

A number of items also got less expensive last month.

Eggs dropped 7.3%, continuing price declines that followed a huge increase caused by, among other factors, a highly contagious bird flu that reduced the number of egg-laying hens last year. This year, the deadly virus seems to be under control. But as supply stabilized, demand failed to keep pace, driving prices down.

Other animal products got less expensive last month, too.

Uncooked beef roasts fell 2.9%, ham went down 2.7%, pork dropped 1.9%, and bacon fell 1.7%. Cheese fell 1.4% and milk slipped 0.3%.

And though together fruits and vegetables went up, some individual items got cheaper: Citrus fruits and apples each fell 2.3%, and lettuce dropped 1.9%.

Source:CNN