The U.S. food inflation rate fell for the fifth month in a row to 10.1 percent for the past year, said the Labor Department on Tuesday. Food, the second-largest consumer expenditure after housing, was a factor in the persistently high U.S. inflation rate.
USDA analysts estimate food prices will rise by 7.1 percent this year, the highest in three decades although a slowdown from 2022.
Food inflation peaked at an annual rate of 11.4 percent last August, according to the Bureau of Labor Statistics. In Tuesday’s report, the agency said prices for cereals and bakery products soared by 15.6 percent, dairy by 14 percent, and “other foods,” a category that includes sugar, butter and salad dressing, by 13.2 percent in the 12 months ending in January. Eggs were 70 percent high in January than a year earlier.
The month-to-month inflation rate climbed by 0.5 percent, food included. The number was “a bit on the hot side but it doesn’t change the scripts that inflation is receding and on track to be back on the Fed’s inflation target by early next year,” said Mark Zandi, chief economist at Moody’s Analytics, on social media.
The Consumer Price Index report is available here.