Supermarket prices rose 0.4% in January, the lowest monthly increase since December 2021, as food inflation continued to slow.
The overall Consumer Price Index ticked up 0.5% last month, driven by increases in gasoline and natural gas costs, and a 0.7% rise in the cost of housing, the Bureau of Labor Statistics reported Tuesday.
The cost of eating at home is 11.3% higher it was a year ago, although monthly increases in grocery prices have been moderating since prices jumped 1.3% in July.
Eggs continue to be a major outlier as food inflation slows. Egg prices jumped another 8.5% in January after rising 11.1 % in January and are up 70.1% year over year. The increase is largely blamed on the impact of the epidemic of highly pathogenic avian influenza.
The cost of fruits and vegetables declined 0.5% in January, and prices for dairy products and fats and oils were both flat, helping offset some increases in other items, including cereals and bakery products, where prices rose 1%, and beef, the cost of which was up 1.1%. The cost of sugar and sweets was up 1.7%.
USDA's Economic Research Service, which forecasts food costs, estimates supermarket prices will increase about 8% this year, well above the historical rate of food inflation.
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Andy Harig, vice president of tax, trade, sustainability and policy development for FMI-The Food Industry Association, warned in a statement that food prices will likely “remain elevated in the short term, and we anticipate that there could be further volatility in terms of inflation rising and falling in the coming months. Yet we continue to remain cautiously optimistic that the worst of food price inflation is behind us.”
FMI represents the largest food retailers, including Walmart, Kroger and Albertsons.
Still, President Joe Biden cited the moderation in food inflation as evidence that his work to rein in the cost of living is working.
"Today’s data confirm that annual inflation has fallen for seven straight months," he said in a statement. "Inflation for food at the grocery store came down again last month. Gas prices are down about $1.60 from their peak last year. And real wages for working Americans are up over the last seven months, delivering welcome breathing room for American families."
Congressional Republicans continue to argue that Biden's own policies are broadly driving inflation.
“House Republicans’ first step to fighting inflation is to put a stop to the wasteful Washington spending that has robbed workers of two months’ pay and jeopardized America’s long-term fiscal health," said House Ways and Means Committee Chairman Jason Smith, R-Mo.
"With the ongoing negotiations over the debt ceiling, President Biden and congressional Democrats have an opportunity to come to the table and work with Republicans to find common-sense solutions to root out wasteful spending that is fueling inflation."
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