The decline in grocery store prices is gaining momentum after the Labor Department’s household food index fell for a fourth consecutive month in May.
Food prices appear to have peaked in the current inflation cycle and are now trending deflationary, falling since January.
Flour prices fell 1.7 percent in May, rice and pasta fell 1.6 percent, beef roast fell 2.6 percent and eggs fell 0.4 percent. Prices of some condiments fell as much as 6 percent.
Overall inflation, measured by the Consumer Price Index, remained steady from April to May and rose 3.25% from a year earlier, above the Federal Reserve’s target rate of 2%.
The price decline follows interest rate hikes by the Federal Reserve, which has kept rates unchanged at 5.25% to 5.5% for nearly a year.
They also follow several Biden administration moves that directly target the grocery industry.
In March, the Federal Trade Commission released a report noting growing profits in the grocery industry and recommending that policymakers take more care of the industry.
The report condemns price gouging and “casts doubt on the assertion that grocery store price increases are simply in step with retailers’ own rising costs.”
Producer prices for food They fell in April but rose in March despite a drop in consumer food prices, suggesting businesses are feeling the pressure of increased scrutiny and may be cutting into profit margins.
Corporate profits have soared following fiscal and monetary stimulus measures enacted in response to the pandemic, helping to squeeze the cost of living and leaving most Americans in a bad mood about the economy.
In a statement, President Biden praised Wednesday’s inflation data and his administration’s work in the food sector.
“While prices are still too high, today’s report represents welcome progress toward containing inflation,” Biden said. “Core inflation is at its lowest level since April 2021. [and] Food prices have fallen for four consecutive months.”
“The cost of living remains high and I know many families feel squeezed, which is why I’m calling on grocery chains, who are making record profits, to lower grocery prices,” he said, listing other initiatives he has taken on pricing.
