Latest CPI Report Shows Modest Rise in Supermarket Prices
The broader Consumer Price Index slipped 0.1% last month due to a 9.4% drop in the price of gasoline, the Bureau of Labor Statistics reported Thursday.
Supermarket prices were 11.8% higher last year than in December 2021, while the broader CPI was 6.5% higher for the year.
The impact of an outbreak of highly pathogenic avian influenza continues to weigh on consumers, primarily in the form of stubbornly high egg prices, which are up nearly 60% year over year. Poultry prices are 12.2% higher year over year but fell 0.6% in December.
The price of beef, meanwhile, rose 1.3% in December but was down 3.1% over the past year.
But there was plenty of good news in the report for consumers.
Pork prices, for example, slipped 0.2%.
Dairy prices were a major driver of inflation through much of 2022 but have continued to moderate. The price of milk fell 1% in December and the overall cost of dairy products slipped 0.3%. Dairy prices, however, were still 15.3% higher last month than in December 2021.
The cost of bakery and cereal products, up 16.1% for the year, was flat in December.
Prices for fruits and vegetables fell 0.6% last month, due in part to lower prices for bananas and citrus.
USDA's Economic Research Service is forecasting that food-at-home prices will rise between 3% and 4% in 2023. Prices for fats and oils and for cereal and bakery products are projected to rise by 5% to 6%. Prices for poultry, eggs and dairy products are forecast 4% to 5% higher.
Andy Harig, vice president of tax, trade, sustainability and policy development for FMI-The Food Association, which represents major supermarket chains, called the December inflation report an "encouraging end cap on an otherwise turbulent year. As inflation slows, economists remain cautiously optimistic about the potential for a soft landing for the U.S. economy.
“Still, the December CPI data reflect that the global food market remains tight. In 2022, we witnessed energy prices become increasingly volatile, creating uncertainty for one of the industry’s most critical input costs. We also continue to monitor severe weather events, trucking and labor, which serve as key influencers on inflation."
The White House said the CPI dropped showed President Joe Biden's economic plan is working. "The president’s economic plan is providing more breathing room to American workers and families through aggressive action to lower gas prices, strengthen our supply chains, and build an economy from the bottom up and the middle out," the White House said.