Inflation is crushing grocery budgets for Americans across the US, with food prices accelerating to a four-decade high in July.
Although the Consumer Price Index, which measures a basket of everyday goods including food, rent and gasoline, came in less-than-expected at 8.5% in July, Food prices have accelerated Also, the Labor Department reported on Wednesday. The food-at-home category, which measures the cost of groceries, is up 13.1% over the past year, the biggest increase since March 1979. Month-over-month prices jumped 1.4%.
“Consumers get a break at the fuel pump, but not at the grocery store,” said Greg McBride, chief financial analyst at Bankrate.com. “Food prices, especially food prices at home, continue to rise, rising at the fastest pace in more than 43 years.”
Americans pay more In the grocery store for a number of items that have skyrocketed in prices over the past year. This includes staples such as eggs (38%), chicken (16.6%), milk (15.6%), potatoes (13.3%), rice (12.7%) and fresh fruits and vegetables (8.2%).
Part of the reason for the unprecedented rise in food costs is the Russian war in Ukraine, which has limited shipments of grain from one of the world’s largest suppliers.
One of the most reminiscent of hyperinflation, which created severe financial pressures on most American households, was the rising food prices. Low-income Americans bear the burden disproportionately, with their already burdensome salaries heavily affected by price fluctuations, particularly for necessities such as food and gasoline.
In another worrying sign, new data from the Labor Department on Thursday tracks Inflation at the wholesale level It showed that food prices rose even higher in July, jumping 1% – the fastest increase in four months. This metric, known as the Product Price Index, captures price movement before it reaches consumers at the retail level and, therefore, may herald looming price increases for businesses and consumers.
“Inflation is only going to fall at a painfully slow pace,” said Sima Shah, chief global strategist at Principal Global Investors. “Food and energy inflation is unbridled. Although inflation will soon peak, breadth and price pressures suggest that core CPI will only fall to 6.5% this year, before recession accelerates the decline in 2023.”
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