The cost of living cooled in July, but not for grocery prices.
The price of food at home went up by 1.3% from June to July, a 13.1% increase compared to last year. The U.S. Bureau of Labor Statistics said it was the largest price increase for groceries since 1979.
The Labor Department said the price of consumer goods and services was steady in July from the previous month. Injuly, the inflation rate was lower than 9.1%, a 41 year record, helped by lower energy prices.
Food rose by 1.1% on the month and 10.9% this year. The price went up by 0.9% and above for the seventh month in a row. In July, dining out increased by 0.7% and 7.6% compared to last year.
Egg prices were the biggest increase among groceries. Their cost went up by 4.3% in the month of July and 38% in the year. Potatoes also increased by 4.6% on the month and 13.3% year-to- year. Coffee rose by over 20% over the same period and butter was up over 26% on the year in July.
There was mixed news amongst other things. The price of beef and veal declined from June to July, part of a three-month downward trajectory. They also rose by 3.4% in July compared to last year.
Despite the fact that shelter and food costs rose significantly, said Rick Rieder, BlackRock's chief investment officer.
The persistence of still solid inflation data seen today, coupled with the strong labor market data last week and perhaps even solid wage gains, puts Fed policymakers on the path toward a continuation of aggressive tightening.
The Core CPI, excluding food and energy prices, rose by 5.9% on the year in July and just 0.3% in the month.
Greg McBride, chief financial analyst at personal-finance site Bankrate, said the core reading of the CPI that excludes the volatile food and energy components is a true trend of what is happening with inflation. The CPI has gone up nearly 6% in the past year. Kayla Bruun, analyst at Morning Consult, said the Consumer Price Index was positive news for the economy. The war in Ukraine and other pandemic related supply-chain disruptions continued to affect food prices, she said.
She said that there will be a fall in commodity prices over the next few months that will filter through to food prices. The increase in grocery prices will continue to put pressure on household budgets.
McBride agrees. Consumers are getting a break at the gas pump, but not at the grocery store, he said.