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Prices are on the upswing for many goods, and people could start feeling the pinch at their next grocery store visit. In particular, beef saw a large increase in prices over one month compared to some other food items.
The price of beef rose by 4.5% in June compared to May, per new data from the Bureau of Labor Statistics (BLS) released on Tuesday. That was largely in tandem with increases for the cost of eggs (3.1%), pork (3.1%), and ham (3.1%). Compared to a year ago, however, the price of beef was down by 2.8%.
Other food prices also rose but not to a similar extent. In June, the price of milk rose by 0.5% and potatoes increased by 1.5% compared to May. It will likely increase grocery store costs for many shoppers.
Prices for various food items have gone up since the start of the pandemic, as seen in the following chart. This is especially the case for beef and veal as well as pork.
Compared to February 2020, the price of beef and veal was 13.2% higher than the price before the pandemic as of June 2021. The price of pork in June was 11.4% higher than pre-pandemic prices. The prices of some bakery items, such as bread and cakes, have also increased compared to pre-pandemic, but not as high as the increases seen with meat.
In addition, the cost of food away from home (such as food ordered at restuarants) rose by 0.7% last month, according to BLS. A note from JP Morgan suggested that could be the result of wage increases for hospitality workers, which is getting passed on to menu prices. Additionally, the cost of food away from home is 4.2% higher than a year earlier.
The rise in food prices aligns with a broader increase in the price of goods throughout the economy. Increased consumer demand has collided with broken supply chains, causing prices to soar due to shipping delays and other problems that are passed onto consumers.
Rising food prices are starting to strain family budgets, The Washington Post reported. It may spur additional food insecurity, which had sharply dropped with the passage of President Joe Biden's stimulus law in March. Some 20 million US adults reported not getting enough to eat at least sometimes in mid-June, per the left-leaning Center on Budget and Policy Priorities.
So far, experts say there's little sign that prices will spiral out of control. Economists at the nonpartisan Congressional Budget Office and the Federal Reserve project inflation will fall to more manageable levels of 2% across the economy as soon as next year.
Ian Shepherdson, chief economist for Pantheon Macroeconomics argued price increases will prove to be "transient," or short-lived as the economy reopens and broken supply chains start mending themselves.
"Inflation expectations have risen merely in line with the increase in food and energy inflation, as usual, with no sign that core expectations are being elevated," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a Tuesday note.
