Helped by tame grocery prices, year-over-year inflation cooled to under 3% in the latest Consumer Price Index report.
All consumer prices increased 0.2% in July, with year-over-year inflation pegged at 2.9%.
The report said the price index for food at home (grocery) rose 1.1% over the last 12 months. The meats, poultry, fish, and eggs index rose 3% over the last 12 months, while the index for cereals and bakery products was unchanged over the last 12 months. The fruits and vegetables index fell 0.2% over the year as did the dairy and related products index, the report said.
The inflation index for food away from home (food service) rose 4.1% over the last year, with the index for limited-service meals rising 4.3% over the last 12 months and the index for full-service meals climbing 3.8%.
“Today’s CPI numbers show that the pace of year-over-year inflation continues to moderate, with food prices remaining a bright spot in the data relative to other sectors like shelter and transportation services,” FMI Vice President for Tax, Trade, Sustainability and Policy Development Andy Harig said in a statement. “Indeed, year-over-year food-at-home inflation at 1.1% remains below the 2.9% increase in overall inflation and demonstrates that eating at home continues to be an economical way for families to manage their food budgets.”
Harig said July’s USDA’s food price outlook predicted a 1% increase in food-at-home prices for the remainder of 2024 and just 0.7% for 2025.
“This should also give consumers additional confidence that grocery inflation will continue to head in the right direction in the coming months, barring any unforeseen shocks,” Harig said.
“Importantly, even though certain food supply chain inputs like energy rose significantly according to the July Producer Price Index, the food manufacturing PPI increased less than 0.1%. This suggests that overall supply chain cost pressures are continuing to ease, which also bodes well for food prices in the short and medium term,” Harig added. “Taken together, the economic outlook for food prices remains positive. While it is true that black swan events can occur, indicators are pointing to continued progress on addressing food price inflation – which is welcome news for both the food industry and consumer alike.”
