Going to the grocery store anytime soon? Brace yourself.
Food prices jumped 1.2% last month, and have shot up 12.2% in the past year, the biggest annual increase since 1979.
For the first time since 1952, grocery prices have risen by 1% or more for six straight months. The cost of dining out increased by 7.7% compared to last year, a 0.9% increase from May.
The rate of inflation reached a 41-year high in June, with prices on consumer goods increasing 9.1% from last year, the U.S. Bureau of Labor Statistics said Wednesday.
But experts said people should not overreact, given that some prices fell in the latter half of June.
“Chicken prices rose by 18.6% on the year and 1.7% on the month. Ground beef rose 9.7% on the year and fell 0.1% on the month.”
“There is even less reason this time to overreact to a hot inflation reading,” said Josh Bivens, director of research at the Economic Policy Institute, a progressive think tank.
“We all know that the main drivers of today’s large number are commodity prices (mostly energy and food),” he said, adding that these prices have fallen sharply in recent weeks.
Food prices have been on the rise due in part to the rising cost of fertilizer, which has been pushed up by supply-chain disruptions related to Russia’s invasion of the Ukraine.
But some people could be forgiven for overreacting to the rise in some food items. The takeaway? Avoid them or use them sparingly.
“Flour increased by 5.5% on the month and 19.2% on the year. Butter and margarine rose by 3.7% on the month and 26.3% on the year. ”
On an unadjusted basis, eggs and milk prices rose 33.1% and 16.4% respectively compared to last year. Eggs were up 0.3% in June compared to the previous month milk was up 0.9% for the same period.
The price of chicken in June rose by 18.6% on the year and 1.7% on the month, while raw beef and most pork products were cheaper in June. Uncooked ground beef rose 9.7% compared to last year, but was 0.1% cheaper in June than in May.
The price of flour increased by 5.5% on the month and 19.2% on the year. Frankfurters sausages rose by 4.8% on the month and 16.3% on the year, and butter and margarine increased by 3.7% on the month and 26.3% on the year.
Americans have been changing their buying habits due to rising prices, with some people trading down to generic store brands and skipping buying meat altogether.
The shifting demand may be starting to affect the rate of price increases on some products. “Meat prices declined for a second straight month in June, and the pace of price growth slowed for categories like eggs and dairy,” said Kayla Bruun, economic analyst at Morning Consult.
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