Wednesday, February 22, 2023

Grocery prices remain stubbornly high - Axios

Data: CPI; Chart: Axios Visuals
Data: CPI; Chart: Axios Visuals

Grocery prices ticked up nationally in January after an apparent inflation respite in December, per the latest Consumer Price Index (CPI) data.

By the numbers: The cost of groceries rose 0.7% in January as compared to the prior month.

  • That comes after December prices rose only about 0.2% from November.

Why it matters: For many of the approximately 63% of Americans living paycheck to paycheck, rising food prices can be an especially difficult financial challenge.

  • Such prices, meanwhile, are particularly vulnerable to outside and difficult-to-control forces, such as climate change and geopolitical happenings.

Zoom in: Among the metro areas with newly published CPI data, some of the highest increases in grocery prices were reported in Denver (+2% between November 2022 and January 2023) and Washington, D.C. (+1.6%). (Data from these areas is published every other month.)

Data: CPI; Chart: Axios Visuals
Data: CPI; Chart: Axios Visuals
  • Chicago had among the lowest increases, at +0.8% between November 2022 and January 2023.
Data: CPI; Chart: Axios Visuals
Data: CPI; Chart: Axios Visuals

The big picture: Mark Schneider, CEO of global food giant Nestlé, recently predicted that the price of staple foods will keep rising this year.

  • "We are still in a situation where we're repairing our gross margin and, like all the consumers around the world, we've been hit by inflation and now we're trying to repair the damage that has been done," Schneider said in a statement, as Axios' Sareen Habeshian reported.

Yes, but: The retail price of one key food — eggs — is expected to drop after a collapse in wholesale prices.

The bottom line: While inflation had appeared to be cooling off broadly speaking, experts are warning that price increases are still possible, even likely — similar to aftershocks following an earthquake.

  • "No one said disinflation would be a smooth ride," Robert Frick, an economist at Navy Federal Credit Union, wrote in a recent note, as Axios' Neil Irwin and Courtenay Brown reported.

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