The U.S. food inflation rate, on the decline since last fall, has fallen to 4.9 percent, aided by the second month in a row of modestly lower prices for meat, poultry, fish, and eggs, said the government on Thursday. It was the lowest food inflation rate since September 2021.
Economy-wide, prices increased by 3.2 percent in the 12 months ending in July, said the monthly Consumer Price Index report from the Bureau of Labor Statistics. “Annual inflation has fallen by around two thirds since last summer, and inflation outside of food and energy has fallen to its lowest level in any three-month period since September 2021,” said President Biden.
Bacon prices were 10.7 percent lower than a year ago, the largest of declines in pork products that included pork chops, ribs, and breakfast sausage, according to the CPI report. Often volatile, egg prices were down by 13.7 percent from last July. Whole milk prices were 4.5 percent lower. But frozen vegetables cost 17.1 percent more, and margarine prices were up by 11.3 percent.
“The meats, poultry, fish, and eggs index declined 0.2 percent over the year,” said the report, the same decline reported a month ago. The other grocery-store food groups posted increases ranging from 1.3 percent for dairy and related products to 7 percent for cereals and bakery products.
Food is the second-largest expense for Americans, consuming 13.4 cents of each $1 in consumer spending; housing is the leading expense at 34.7 cents of the dollar.
“To be sure, the high inflation of the past 2+ years has done lots of economic damage,” said Mark Zandi, chief economist at Moody’s Analytics, on social media. “Due to the high inflation, the typical household spent $202 more in July than they did a year ago to buy the same goods and services. And they spent $709 more than they did 2 years ago. But the trend lines look good, and suggest inflation is set to moderate further.”
The USDA estimates food prices will be an average of 5.8 percent higher this year than in 2022, and food prices will rise by 2.4 percent in 2024, in line with the long-term average of a 2.8 percent increase annually.