Inflation: Grocery prices see small decline last month as egg prices drop and processed foods see sticky inflation
The cost of groceries is slowly coming down, but inflation is still holding on.
Food prices increased slightly in the month of June, rising 0.1% on a monthly basis, which was unchanged from the month prior but less than back in April when prices increased 0.2%. Grocery prices decreased slightly, down 0.1%, that's only a tick lower than the previous month when prices remained flat. On a year-over-year basis, grocery prices rose at a slower rate than the month prior, up 4.7%. That's according to the Bureau of Labor Statistics' (BLS) June Consumer Price Index (CPI) published Wednesday morning.
Per BLS economist Steve Reed, that's the smallest 12-month change since September 2021.
Let's start with the good news: Egg prices continue to drop. On a monthly basis, the price of eggs is down 7.3%. Year over year, the price of eggs dropped 7.9%. As of June 2023, the cost of a dozen large grade-A eggs was $2.22. That's compared to $4.82 back in January of this year.
"Eggs is a very volatile index and, of course, was really thrown around by avian flu issues, and now it's landed at a spot where it's lower than it was a year ago," Reed said.
This decline brought the overall meats, eggs, poultry, fish, and eggs category lower as well, down 0.1% month over month and down 0.2% year over year. Other pork products including roasts, steaks, and ribs are down 2.1% month over month, while lunch meats are down 0.6%. Uncooked beef roasts and uncooked ground beef are still higher, however, up 1.6% last month.
Dairy and related products also saw a decline, down 0.5%. On a monthly basis, the price of milk dropped 0.7%, and fresh fruits dropped 1.1%. That was partially offset by a monthly jump in tomato prices, up 4.6%.
Nonalcoholic beverages and beverage materials declined 0.1%, with instant coffee driving that decline, down 1.0% on a monthly basis.
Inflation is still sticky for certain categories and items, though, especially processed foods, which are impacted not only by the cost of raw materials but also by labor inflation, transportation costs, and more, which impact the price tag consumers see in store.
Cereal and bakery products were up 0.2% last month and up 8.8% year over year. The cost of fresh sweet rolls, coffeecakes, and doughnuts was up 2.0% on a monthly basis.
Prices for the "other food-at-home category," which includes sugar and sweets, fats and oils, and snacks, were unchanged on a monthly basis, but up 7.1% year over year.
And talk about sticky: Within that category, candy and chewing gum prices jumped 2.2% in June. That's the largest increase since January 2020. Salad dressing dropped slightly, down 1.5%, but is still up 10.3% on a yearly basis. Margarine is up 13.1% compared to June last year, but butter is seeing some relief, down 1.4% year over year.
On a positive note, given small monthly movements now, Reed added: "The basic story there is [for] food at home, prices are just very flat."
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
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