US food inflation in retail and the out-of-home channel has slowed to below 10% for the first time since last April.
Prices climbed 9.5% in February from a year earlier, the least since the 9.4% print in April last year and down from January’s rate of 10.1%, the US Bureau of Labor Statistics reported in its latest inflation numbers. The cost of food has now eased for six straight months after reaching a peak in August of 11.4%.
However, breaking down the all-items food index into food-at-home and eating out, the cost of a grocery shop rose 10% from a year earlier in February. Prices in a restaurant or foodservice outlet climbed 8.4%.
Cereals and bakery led the annualised increase in food at retail, rising 14.6%, with prices for other goods ranging from 5.3% to 12.4%.
The headline rate of inflation covering all goods, cooled to 6% last month, from 6.4% in January, but still remains well above the US Federal Reserve’s target rate of 2% on an annualised basis. Nevertheless, it has eased for eight consecutive months from 9.1% in June.
Some food manufacturers are still pointing to elevated prices for the rest of the year with some indicating further price increases to recover costs as they continue to work through the supply chain pressures from Covid.
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The protracted war in Ukraine is also creating headwinds but food commodity costs are coming down, leaving food producers to work through previously placed hedging contracts. It has also emerged this week Russia is on the verge of extending the Black Sea grain deal, which would enable the continued passage of food inputs such as wheat and corn out of three Ukrainian ports.
Prices have also eased in the US in month-on-month terms. The all-items index of inflation was 0.4%, from 0.5% in January.
With respect to food, month-on-month inflation stood at 0.4% in the US in February, compared to a 0.5% increase a month earlier. Non-alcoholic beverages were up 1%, cereals and bakery 0.3% and fruit and vegetables 0.2%. Dairy prices climbed 0.1%.
On the protein side, prices fell, with the index tracking meat, poultry, fish and eggs down 0.1%, the first decrease since December 2021, the Bureau said.