The increases are seemingly small – an additional 27 cents for a pound of ground chuck at the grocery store, for example – but they are part of a brisk 3.5 percent increase in food prices since the pandemic hit the United States last March. The increase in food prices outpaced the overall U.S. inflation rate of 2.6 percent, the government said on Tuesday.
Groceries, which account for somewhat more than half of consumer spending on food, were up by 3.3 percent and “food away from home,” ranging from restaurant meals to cafeterias and vending machines, was up by 3.7 percent, said the monthly Consumer Price Index report.
With a 5.4 percent increase, meat, poultry, fish and eggs led the 3.3 percent rise in grocery inflation over the past year, although all six categories of food were higher than a year ago, said the Bureau of Labor Statistics. Ground chuck cost an average $4.38 a pound last month, compared to $4.11 a pound in March 2020. A gallon of whole milk costs 10 cents more, a pound of white bread is 16 cents more and whole chickens are an additional 14 cents a pound.
Limited-service meals, a “food away from home” grouping that includes take-out food and meals delivered to the home, rose by 6.5 percent, the largest 12-month increase since the government began tracking them in 1997. Reflecting the shutdown of schools and offices, the sub-index for food at employee sites and schools plunged by nearly 35 percent since last March.
The change in prices was amplified by the difference in economic conditions. Last March, consumer prices fell because shoppers stayed home because of the coronavirus. This year, Americans are willing to spend money as the country re-opens.
Gasoline prices are 22 percent higher than a year ago, when sales plunged. The BLS said gasoline prices rose by more than 9 percent in March and accounted for nearly half of the seasonally adjusted increase in prices for the month. The 0.6 percent increase in March was the largest for a single month since August 2012.
The USDA forecasts food prices will rise by 2.5 percent this year, close to the historical average of 2.4 percent annually. It says meat prices will hold steady this year after surging by 7.4 percent last year. Beef and pork prices spiked last spring following Covid-19 outbreaks that slowed or temporarily shut some of the largest meatpacking plants in the nation.
Americans spend 14 cents of each $1 on food, says the BLS.
The inflation rate reported by the government was slightly higher than expected. “Economists and Federal Reserve officials do not expect these increases to persist for more than a few months but if they did, it would matter to consumers and investors alike,” said the New York Times.