Grocery Prices Had Biggest Single-Month Jump Since 1974
Bakery items and cereal went up by 2.9%, the biggest increase in more than 100 years.
On Friday, the U.S. Bureau of Labor Statistics released a devastating April jobs report, which revealed that the U.S. economy lost more than 20.5 million jobs in a single month, including the loss of 5.5 million jobs in the restaurant and industry alone. Four days later, it followed that hard-to-swallow news with its April Consumer Price Index, which noted that the cost of a wide range of supermarket staples has jumped by 2.6%, the biggest one-month increase since February 1974.
The Consumer Price Index measures the average change in the cost of consumer goods in a number of categories including food—both in grocery stores and at restaurants—other retail commodities, new and used vehicles, gasoline, and electricity and other utilities. The April food-at-home index, which tracks grocery prices, determined that the cost of meat, poultry, fish, and eggs rose by 4.3%—egg prices alone jumped by 16.1%—non-alcoholic beverages were up by 2.9%, and both the dairy and fruit and vegetable categories saw modest increases of 1.5%. The price of bakery items and cereal also went up by 2.9%, which is the largest single-month increase in more than 100 years.
According to some industry experts, our more expensive grocery bills are due to an unsurprising combination of coronavirus-related factors, including disruptions to the food supply chain and increased demand for supermarket staples due to widespread restaurant closures. In addition, by the beginning of May, U.S. beef and pork processing capacity had fallen by 40% compared to the same time last year, largely due to the temporary closures of meat processing plants.
“I do think this will probably continue for several months,” David Henkes, a senior principal at foodservice research firm Technomic, told Boston.com. “There are production issues in some parts of the food industry, and it’s hard to realign the supply chain overnight. At the same time, each of these manufacturers and distributors needs to figure out how to start re-servicing restaurants and other food service establishments as they start to come back online, all of which will have an impact on supply, demand and ultimately pricing."
In contrast to the increased cost of buying groceries, the Bureau of Labor Statistics noted that its 'food away from home' index, which includes restaurant meals, only increased by 0.1% in April, down from a year-to-date high of 0.4% in January.
As some states start to move past the end dates of their stay-at-home orders, and restaurants begin the slow and complicated process of safely reopening to dine-in (or dine-on-patio) customers, it will be interesting to see how these numbers change in the next few months. Unfortunately, it seems like a return to "normal"—whatever that might look like—could still be a few more monthly Consumer Price Indexes away.