Consumer prices in July rose 0.5% over June and 5.4% year over year, matching the 12-month surge recorded last month, the Bureau of Labor Statistics reported.
At the grocery store, consumers continued to see higher prices for meat, poultry, fish and eggs (up 1.5% vs. June), as protein prices rose for the seventh month in a row. Prices for cereals and baked goods (up 1.2%) as well as other center-store foods (up 0.8%) saw their largest one-month increases since April 2020.
The year-over-year story for several top grocery categories is even more notable: Consumers in July paid 6.5% more for beef, 5.2% more for chicken, 6.6% more for seafood, 6.2% more for milk and 5.2% more for fresh fruit than they did in July 2020.
Last month, market researcher IRI reported that 28% of consumers in June said they were very concerned about food-cost inflation, and 32% believe that food prices are much higher than they were before the COVID-19 pandemic.
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Overall, grocery prices rose 0.7% in July over June and are up 2.6% in the past 12 months. "All six major grocery store food group indexes rose over the span," the BLS noted, "with increases ranging from 1.1% (nonalcoholic beverages) to 5.9% (meats, poultry, fish and eggs)."
Notable price increases last month occurred in bread, crackers and cracker products, with prices surging 3.7% over June and 4.6% over July 2020. Pork roasts, ribs and pork steaks saw retail prices rise 4.4% month to month, and prices are up a whopping 13.7% year over year. Prices for fresh and frozen chicken parts, frozen seafood and beef roasts and steaks also rose month over month and year over year in July.
At restaurants, prices increased even more as establishments of all sizes grapple with higher food and labor costs amid strong consumer demand. Food-away-from-home prices climbed 0.8% in July over June, the largest monthly increase since July 1981. In the past 12 months, restaurant prices have surged 4.6%, with prices at limited-service (up 6.6%) and full-service (up 4.3%) establishments climbing at the highest rate since the indexes were first published in 1998.
Jerome Powell, chairman of the U.S. Federal Reserve, has reiterated in recent weeks that the Fed wants to see the U.S. economy achieve 2% inflation over the long term and is therefore comfortable with prices running somewhat higher in the short term to make up for previous sub-2% inflation and as the U.S. works toward full employment.