The trip to the grocery store is getting easier on the wallet.
Food at home prices rose a modest 1.3% for the year ended in December, according to the Bureau of Labor Statistics’ latest Consumer Price Index report, released Thursday.
That’s the lowest annual increase registered since June 2021 and a far cry from the 11.8% increase registered in December 2022.
Overall food prices were up 0.2% on a monthly basis, matching the rate of increase seen in November, CPI data shows. For the year, food prices are up 2.7%, remaining below the overall inflation rate of 3.4%.
Driving that increase is the food away from home category (meals and snacks at restaurants, vending machines and other venues), which is up 5.2% annually.
“Food away from home’s increase is down from March’s multidecade peak of 8.8%, but still faster than any time between 1983 and 2020,” Bill Adams, chief economist for Comerica Bank, wrote Thursday. “Wages for lower-paid occupations like restaurant jobs are growing faster than the US average, creating price pressures that restaurants are passing on in higher prices.”
He added: “But the big picture is that the economic dislocations caused by the pandemic are fading, economic growth is settling into a more normal pace, and labor shortages are much less of an issue, helping bring inflation back to normal.”
Where prices went higher
If the lure of a fox, a box, a mouse and a house were not enough to encourage Sam-I-Am to chow down on some green eggs and ham, Thursday’s inflation data surely won’t help matters either.
Eggs and ham prices went up the most in December as compared to other food categories tracked in the CPI.
Prices of eggs (the standard, non-green-yolked variety) shot up 8.9% from November, marking the highest monthly increase since January of last year as bird flu has once again struck the industry. For now, economists believe this latest avian flu won’t be as severe as the one in 2022 that devastated flocks and sent egg prices sky-high (at one point rising 70% year over year).
For the 12 months that ended in December, egg prices are down 23.8%.
Also in December, those Christmas hams saw some inflation as well. Ham prices rose 2.6% for the month (2.9% excluding canned ham), BLS data showed.
Fats, oils and peanut butter products saw a similar increase of 2.6% in December, while raw beef steak prices picked up 2.4%.
On an annual basis, the highest price hikes continue to be in the categories of frozen noncarbonated juice and raw beef steaks, which are up 19.1% and 11.2%, respectively.
The tubes of frosty juice have shot up in price because of bad weather (hurricanes, in particular) and a devastating citrus disease. And recent bouts of extreme drought in the United States have resulted in a reduction of cattle herds, constricting beef supply.
Crackers (+7.7%), baby food (+7.3%) and sugar (+6.9%) also are seeing some of the highest gains from a year ago.
“I think people are particularly annoyed when they do things like go to the grocery store and see high prices,” Wendy Edelberg, direct of The Hamilton Project and senior fellow in economic studies at Brookings, told CNN. “But so many of these prices that we see day in and day out, these prices have the potential to just outright fall.”
Where prices are falling
Some products are getting easier on the wallet and at a good time for those fresh New Year’s resolutions: Notably, lettuce, which was down 4% from November and 16.7% from the year before.
Potatoes are getting cheaper as well, dropping 2.8% from November and declining annually at the same rate.
Aside from eggs and lettuce, the categories seeing the largest annual price declines as of December are tomatoes (-7.2%), apples (-5.9%), and fresh vegetables overall (-4.8%).
Other annual declines were seen across the dairy aisle, including cheese, butter and milk, which were down 3.3%, 2.9% and 1.8%, respectively.
