Grocery prices are continuing to rise—although more slowly.
Americans continued to feel the pinch of rising prices and high inflation at the grocery store in January, according to new government data released by the Bureau of Labor Statistics (BLS) on Tuesday. Prices for food at home rose 0.4% in January over the previous month, though several food items cost slightly less
The most significant price increase was for a dozen grade A eggs, which cost $4.82 in January, up 13.4% from December. Butter also rose in price by 1.48%, to $4.88 per pound.
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“We still have a ways to go before we’re in that position of pre-pandemic costs of groceries—if we even ever get back to that level,” Tom Bailey, senior analyst of consumer foods with Rabobank, said prior to the release of the new inflation data.
Overall inflation continued to decline slightly, dropping to 6.4% in January, compared with a year earlier—bolstering hopes that inflation’s grip on the economy will continue to ease this year and the Federal Reserve can slow its interest rate hikes. That’s a step down from the 6.5% rate in December, and a drop from last summer’s peak of 9.1%.
The softer readings signal that the most severe inflation in four decades is gradually dissipating, analysts say. The disruptions in the supply chain have largely been resolved, which is helping decrease the cost of various items such as cars, shoes, furniture and sporting goods.
Federal Reserve Chair Jerome Powell said last week that the lengthy process of getting inflation down is probably “not going to be smooth” and confirmed that the Fed would likely raise interest rates more.
But grocery prices have been the dominant outlier.
Alana Auston, a 24-year-old senior strategic planner from Flint Township, Mich., says her family of three is now spending twice as much on groceries compared to last year. A look at her receipts shows that her family spends around $400 on larger trips to the local grocery store, where they buy fruits, vegetables, meats and frozen items, and around $100 on smaller, in-between trips.
“Items that I regularly buy that stood out to me on my last trip were eggs, juice and frozen chicken nuggets,” Auston says. “I usually buy 18-count large eggs, and those have gone up to $9 from $4.50; juice on my last trip was on sale for $5; frozen chicken nuggets that we keep on hand for days we don’t feel like cooking a big meal have gone up to $8.30 from $4.”
The continued rise in grocery prices has forced some families to change their spending and eating habits. With the price of eggs at a record-high, some households have begun raising chickens.
“When our economy is ‘good,’ consumers don’t necessarily feel the rewards tangibly, but when it’s ‘bad,’ we definitely feel the bad,” Auston says. “Right now, I would have to think it’s bad. I don’t think inflation will necessarily get better. This period of inflation is just a blurb in the middle of other constantly inflating prices. All I can do is adjust accordingly with my savings.”
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