Food prices continued to moderate in July, with costs for eggs, milk and chicken declining. But overall costs picked up slightly over the month, underscoring how stubborn price pressures have been.
The cost of food rose 0.2 percent in July from the prior month, a slight increase from 0.1 percent in June, according to data released Thursday by the Bureau of Labor Statistics.
Grocery prices rose 0.3 percent in July, up from June, when prices were flat. The cost of eating at restaurants continued to rise, climbing 0.2 percent over the month, a slowdown from 0.4 percent in June.
Food inflation has slowed in recent months, bringing relief to grocery shoppers who have been pinched by higher prices. Still, food prices are much higher than they were a year ago, and costs have been climbing at a faster rate than normal. In the year through July, food prices rose 4.9 percent, down from 5.7 percent in June.
Prices for fruits and vegetables increased 0.4 percent in July, cooling from a 0.8 percent increase in June. A gauge of costs for meats, poultry, fish and eggs rose 0.5 percent in July, a pick up from June, when prices declined 0.4 percent.
Egg prices continued to tumble after an outbreak of bird flu and other factors led to a surge in prices earlier this year. In July, egg prices fell 2.2 percent from the prior month, which came after a 7.3 percent decline in June.
Some economists said they expected food inflation to continue to moderate in the coming months but that risks remained.
Diane Swonk, the chief economist at KPMG, said food price increases had cooled in recent months, in large part because earlier supply shocks had abated. Lower fuel prices have also helped bring down the cost of transportation.
But, she said, food prices could still face pressure from various factors, such as the damage from record heat on crop yields and the collapse of the Ukraine grain deal last month. At a news conference in late July, Jerome H. Powell, chair of the Federal Reserve, said that he did not expect the subsequent rise in grain prices at the time to “make a significant contribution to U.S. inflation,” but that officials would continue to monitor the situation carefully.
Many consumers are still finding it difficult to afford higher food costs, even though prices are rising at a much slower pace than they were a year ago, Ms. Swonk said.
“For consumers who just now saw wages outpace inflation for the first time since the onset of pandemic on an individual basis, the level of prices is still too high for them,” she said.
Madeleine Ngo
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