Dive Brief:

• Food-at-home prices rose in May at a 5.8% annual rate, down from 7.1% during the prior month, according to Consumer Price Index data released Tuesday by the U.S. Bureau of Labor Statistics.
• The food-at-home index edged up 0.1% in May compared with April, reversing the 0.2% month-over-month decline recorded last month.
• Overall inflation fell in May by nearly a full percentage point to a 4.0% annual pace — the lowest yearly rate for the CPI in more than two years.

Dive Insight:

The latest CPI figures from the BLS underscore just how dramatically the U.S. inflation picture has changed this year compared with 2022, when prices were zooming upward at a seemingly boundless clip.

The year-over-year decline in the food-at-home index in May represents the fifth month in a row where the rate has lost more than a full percentage point compared with the previous month.

At 5.8%, grocery inflation is now at less than half the level it reached last August, when the gauge hit a 13.5% annual rate — the fastest rate of food-at-home inflation in more than four decades. Since reaching that crescendo, the food-at-home index has notched an unbroken string of year-over-year declines, a streak that has brought the metric to its lowest level since October 2021, when it came in at 5.4%.

While grocery inflation has been steadily losing steam when viewed from an annual perspective, month-to-month data tells a bit of a different story. The monthly increase in the food-at-home index in May broke a two-month string of declines that reflected the only periods when grocery inflation has retreated month-to-month since January 2021.

Produce played a key role in pushing monthly grocery prices up last month, according to the BLS. Fruits and vegetable prices were up 1.3% in May compared with April, leading the way among the main food-at-home categories the agency tracks.

Prices for apples rose 1.9% month-to-month in May, while lettuce prices surged 5.3%. By contrast, prices for citrus fruits and bananas lost steam.

Meanwhile, prices for dairy and related products were off 1.1% in May compared with April, and prices in the category that includes meats, poultry, fish and eggs moved lower at 1.2% monthly clip. Egg prices declined at an especially fast monthly pace in May, dropping 13.8%.

Consumers continued to take measures in May to deal with inflation, with 57.9% of the respondents to a poll conducted by GlobalData Retail late last month indicating that they traded down to cheaper food and grocery brands — a slightly higher percentage than in April.