Food Prices Rise Even as Inflation Eases, Straining Consumers’ Budgets

Hanna Hensley, 29, an assistant high school teacher in Arlington, Va., is glad to see some food prices come down recently, because it has helped ease her grocery bill.

When egg prices shot up to around $5 a carton a few months ago, she stopped buying them. But on Sunday, while shopping at a Giant Food store, she picked up a carton of them, along with oatmeal, tomatoes, mushrooms and sliced marble cake. A dozen eggs now cost her about $2.50, she said.

Despite some relief at the grocery store, Ms. Hensley said she was still frustrated with the high cost of food. Weekly groceries for her family, which includes her parents and sister, now total about $100, up from $70 before the pandemic.

After remaining flat for two straight months, food costs climbed 0.2 percent in May from the prior month, according to a Labor Department report released on Tuesday. That gain defied a cooling trend in inflation: Overall prices rose 4 percent in the year through May, the slowest pace in more than two years.

On a monthly basis, food prices are rising at a slightly slower rate than they were earlier in the year, but costs are still much higher than they were before the pandemic. Over the last year, food prices picked up 6.7 percent, down from 7.7 percent in April.

The price increases are particularly painful for households because food is an essential part of their budgets. Lower-income households tend to be hit harder because they typically spend a greater portion of their incomes on food.

Prices for groceries rose 0.1 percent in May from the month before, when they declined 0.2 percent. Prices for food at restaurants continued to climb, rising 0.5 percent over the month, an increase from the 0.4 percent pop in April.

Fruit and vegetable prices increased 1.3 percent in May, after a 0.5 percent decrease in April. The index for meats, poultry, fish and eggs fell 1.2 percent in May after declining 0.3 percent in April. Egg prices continued to see a steep decline, falling 13.8 percent last month. Egg prices had jumped a few months ago after an outbreak of bird flu and an increase in the cost of fuel, feed and packaging.

Fam Chock, 43, an accounting specialist at a nonprofit in Washington, said that she was surprised to see the price of eggs come down recently, but that she had not noticed other products become cheaper. Ms. Chock said groceries for her family now totaled about $1,000 a month, up from about $600 before the pandemic.

“It’s a family of four, so all of that adds up,” she said. “We’re not buying anything extravagant.”

Her family has cut back spending in various ways: They used to eat at restaurants about four times a week, but now they go out once a week, at most. She rarely buys the rib-eye steaks her husband likes, and she started growing more vegetables in her home garden, including sugar snap peas, which she said had nearly doubled in price at the grocery store since before the pandemic.

Ms. Chock was at Safeway on Monday buying strawberries, fried chicken and pickles with her co-worker Lashanor Doolittle for a staff lunch. Ms. Doolittle, 60, an administrator at the nonprofit, pointed to the two bags of chicken in their cart, noting that they were buying them because they were on sale.

Ms. Doolittle said she had also made adjustments to deal with the high cost of food, including buying most of her groceries in bulk at Costco.

“Everything I tend to buy has become more expensive,” Ms. Doolittle said. “I’m always looking for coupons.”

Food prices began rising sharply about two years ago as the costs of labor, transportation and raw materials increased, partly because of supply chain snarls and higher fuel prices. That led companies to pass along some cost increases to consumers for a wide variety of products. Other factors, such as extreme droughts in the Western United States, have also strained supply and pushed up food prices.

Though costs for some raw materials have recently fallen, some large corporations, such as PepsiCo, have signaled that they will continue increasing prices or keep them elevated for the foreseeable future as consumers have largely kept buying products.

Still, economists say overall food prices could show signs of moderating as labor pressures ease and wage growth across the food industry slows, reducing stress for companies. Recent declines in fuel prices have also helped bring down transportation costs.

Biden administration officials have highlighted the recent slowdown in price increases for groceries, although they have said, “The job is not done yet and there is considerable uncertainty around the outlook.”

Some shoppers have taken little comfort in the recent easing of price increases.

Sofia Arias, 27, a management analyst at a federal agency, picked up bananas, bell peppers and chicken at a Whole Foods in Washington on Monday. She said that there were less expensive stores in the area, but that she tried to buy as much organic food as possible and had more room in her budget because she was single and did not have to shop for others.

She said her groceries, which usually lasted her about two weeks, would cost about $150, up from about $100 before the pandemic. Many products have grown more expensive: A container of cottage cheese that cost about $3.50 at the beginning of the pandemic now costs $5, she said.

Ms. Arias said she had cut back expenses in other ways, such as dining out less, curtailing snacks and eating at home before going out for drinks. She said that she had seen egg prices fall, but that she had not noticed much relief elsewhere.

“I don’t know if it’s getting better,” she said. “I just feel like the cost of living is ridiculous.”