Dive Brief:
- Food-at-home prices increased in February at a 1.9% annual pace, a rate that was unchanged from January, according to Consumer Price Index data released Tuesday by the U.S. Bureau of Labor Statistics.
- Overall inflation cooled last month to a rate of 2.8% — its slowest annual pace since November 2024
- Grocery inflation, which had been on the rise since last November, remains at its highest level since October 2023.
Dive Insight:
While grocery inflation is well below the multi-decade highs it hit in 2022, rising prices for a relatively small group of foods have gradually pushed the closely watched metric up in recent months, reversing a steady decline that saw it bottom out at 0.9% last August.
The food-at-home price index started to tick up in November after staying at or close to an annual rate of 1% during most of 2024, the BLS reported. The gauge, which had also been moving up steadily on a month-to-month basis, was unchanged in February by that measure.
Prices for eggs and meat played an outsize role in keeping grocery inflation up in February. Egg prices were just under 59% higher last month than they were in February 2024 and rose 12.5% on a month-to-month basis. The index for meat, poultry, fish and eggs was up at a 7.7% annual clip, with beef and veal prices up a yearly rate of 7.6%. Pork prices, however, moved up at a more modest pace of 1.8%, although prices for bacon and related products rose at 2.7%.
Prices for dairy products as well as cereals and baked goods rose slightly in February, but produce prices fell. Fresh vegetable prices declined by 2.5% during the month on an annual basis, led by tomato prices, which were off by just under 10%. Fresh fruit prices rose, led by costs for apples and oranges.
Although grocery inflation was in check during February, the industry faces uncertainty over costs going forward as a global trade war fueled by tariffs imposed or threatened by the United States and other nations unfolds. The tariffs include steep levies on goods from Canada and Mexico, two of the nation’s largest sources of imported foods.
Canada accounted for a fifth of all agricultural products imported by the U.S. in 2023, according to the USDA. In 2023, Mexico supplied two-thirds of the vegetables and nearly half of the fruits and nuts the U.S. imported, the agency reported.
The decline in overall inflation last month was lower than analysts had expected. Economists surveyed by The Wall Street Journal indicated they thought the figure would come in at 2.9%.
