Financial Services Committee member French Hill discusses how American families are struggling despite a slight drop in inflation in July in Fox Business Tonight.
Inflation is crushing Americans’ grocery budgets in the US, with food prices rising to a new four-decade high in July.
Although the consumer price index, which measures a basket of essential necessities including groceries, rent and petrol, came in cooler-than-expected 8.5% in July, food prices have continued to accelerate, the Labor Department reported on Wednesday. The home groceries category, which tracks the cost of groceries, rose 13.1% last year, the sharpest increase since March 1979. On a monthly basis, prices rose 1.4%.
“Consumers are getting a break at the pump but not at the grocery store,” said Greg McBride, chief financial analyst at Bankrate.com. “Food prices, and particularly the cost of groceries at home, continue to rise and are rising at the fastest rate in more than 43 years.”
Americans are paying more at the grocery store for a number of items that have risen significantly in price over the past year. This includes staple foods such as eggs (38%), chicken (16.6%), milk (15.6%), potatoes (13.3%), rice (12.7%) and fresh fruits and vegetables (8.2 %).
BREAKDOWN OF JULY INFLATION: WHERE WILL RISING PRICES HIT AMERICANS HARDEST?
One reason for the unprecedented rise in food costs is the Russian war in Ukraine, which curtailed grain supplies from one of the world’s largest suppliers.
Soaring food prices have been one of the most poignant reminders of the blistering inflation that has put most US households under severe financial pressure. The burden will be borne disproportionately by low-income Americans, whose already stretched paychecks are badly hit by price swings, especially for basic necessities like groceries and gasoline.
In another worrying sign, new Thursday data from the Labor Department, which tracks wholesale inflation, showed that food prices rose 1% in July – the fastest rise in four months. Known as the producer price index, this measure captures price movements before they reach consumers at the retail level and can therefore predict impending price increases for businesses and consumers.
People shop for produce at a store in Rosemead, California on June 28, 2022. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
“Inflation will come down painfully slowly,” said Seema Shah, chief global strategist at Principal Global Investors. “Food and energy inflation are wild cards. Although inflation should soon peak, the extension and persistence of price pressures means headline CPI will only fall to 6.5% this year before the recession accelerates the decline in 2023.”