U.S. retail grocery prices increased 0.8% in May and are running nearly 5% above a year ago, according to the U.S. Department of Agriculture.
The USDA’s June Food Price report said retail grocery prices were increasing faster than prices for food sold at restaurants.
Prices for food sold at restaurants increased by 0.4% from April to May, and stood 2.9% higher than May 2019. For food sold at grocery stores, prices jumped 0.8% from April to May. Compared with a year ago, retail grocery prices in May were 4.8% higher than a year ago.
For all of 2020, the USDA now predicts that retail grocery prices will increase 2.5% to 3.5%. Restaurant food prices are projected to increase in a range from 1.5% and 2.5% in 2020, according to the agency.
Inflation for fruits and vegetables increased 0.7% from April 2020 to May 2020 and is up 1.5% compared with a year ago. The USDA said labor costs have risen because of COVID-19.
“With some exceptions, most fresh-market vegetable growers rely on human labor to produce and place a crop into supply channels,” the USDA report said. “It is anticipated that skilled labor will be scarcer and procedural changes to comply with recommended social distancing may reduce productivity.”
Inflation for fresh vegetables rose 0.9% from April to May, while fresh fruit increased 0.2%.
For the year, retail inflation for fruits and vegetables is projected to increase as much as 1%, according to the report.