US Grocery Prices Went Up by Biggest Percentage Since 1974, Department of Labor Says
There's a decent chance you've thought more about grocery shopping over the past two months than you have in years. Between planning a safe trip down the aisles to navigating the realities of empty shelves, shopping for food in a time of social distancing and panic buying isn't as easy or affordable as it used to be.
According to new data from the Department of Labor, the prices U.S. consumers paid for "food at home," a category that includes groceries, jumped by 2.6 percent in the month of April. This was despite an overall 0.8 percent decline in the U.S. consumer price index. That significant April rise puts grocery prices up 4.1 percent over the last 12 months.
While those figures might seem small in the abstract, they become more significant when viewed in context. April's historic rise was more than five times larger than the food at home price index increase in March, when states first began issuing their shelter in place orders. It's also the biggest month-over-month increase since February 1974, when the U.S. economy was in the throes of another recession.
Given both surging demand and supply chain issues including processing plant closures, the price index for meats, poultry, fish, and eggs saw an overall 4.3 percent increase in April. Taken by themselves, egg prices shot up an astounding 16.1 percent. Both nonalcoholic beverages and the cereal and bakery products outpaced the overall increase, going up 29 percent.
It's worth pointing out that some categories saw smaller price increases during this historic period. Dairy, which has had well-publicized problems with its supply chain, saw its price index rise 1.5 percent. Fruits and vegetables prices rose by the same amount. So if you want to avoid dealing with the biggest price bumps, stick to the dairy aisle and the produce section.
As some states begin to reopen (for better or worse), it's possible that the upward pressure on the food at home price index will dissipate. But amid an uncertain economy and a supply chain thrown into disarray by the closure of wholesale clients like restaurants, there's still a chance things continue to get worse before they get better. As with so much of what the world faces right now, the only certainty is more uncertainty.
Keep Reading: How to Save Money on Groceries for Cooks on a Budget