Pushed by high meat prices, food inflation rate hits 7%
Food prices are rising at a faster and faster rate, reported the Labor Department on Thursday. Food inflation, a modest 2.2% a year last May, started 2022 at a 7% gallop, the eighth month in a row the rate has gone up.
The Consumer Price Index report pegged the U.S. inflation rate at 7.5% over the past 12 months, the highest rate in 40 years. Both gasoline and used car prices were up by 40% since January 2021.
“On higher prices, we have been using every tool at our disposal,” said President Biden, “and while today is a reminder that Americans’ budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge.”
Inflation “stuck to script, more or less,” said Mark Zandi, chief economist at Moody’s Analytics, on social media. “We have a few more months of hot inflation readings, but as the pandemic fades, which seems a reasonable assumption, so too will inflation.”
Meat prices rose nearly 14% in the past year, said the Bureau of Labor Statistics. Bacon was up by 18% and beef roasts by 19%. The average nationwide price of ground chuck was $4.77 a pound in January, compared with $4.31 in January 2021.
“The index for food away from home rose 6.4% over the last year, the largest 12-month increase since January 1982,” said the government. Food away from home includes carry-out food and food bought in restaurants, cafeterias, and vending machines. “The index for food at employee sites and schools, in contrast, declined 46.9% over the past 12 months, reflecting widespread free lunch programs.”
High prices have not dented America’s appetite for red meat and poultry. Per capita consumption was a record 225.3 pounds in 2020 and 2021, estimated the USDA this week. Consumption was forecast at 225 pounds per person this year.
Food accounts for 13.4¢ of the consumer dollar and is the second-largest consumer outlay. Housing, at 33¢, is the largest.