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Financial Services Committee member Frances Hill discussed on “Fox Business Tonight” in July how American families are struggling even if inflation is low.
Inflation is crushing the grocery budgets of Americans across the US, with food prices hitting new four-decade highs in July.
The consumer price index, which measures a basket of everyday goods including food, rent and gasoline, fell 8.5% in July, but food prices rose more, the Labor Department reported Wednesday. Food at home, which tracks grocery spending, rose 13.1% from a year earlier, the biggest increase since March 1979. Prices rose 1.4% on a monthly basis.
“Consumers are getting a break at the gas pump, but not at the grocery store,” said Greg McBride, chief financial analyst at Bankrate.com. “The price of food, and especially the cost of food at home, has been increasing at the highest rate for more than 43 years.”
Americans are paying more at the grocery store for record high prices last year. This includes things like eggs (38%), chicken (16.6%), milk (15.6%), potatoes (13.3%), rice (12.7%) and fresh fruits and vegetables (8.2%).
July inflation: Where are the price hikes hitting Americans the hardest?
One reason for the unprecedented increase in food costs is Russia’s war in Ukraine, which has limited grain shipments from one of the world’s biggest suppliers.
Rising food prices are one of the most common reminders of red-hot inflation, which has put a heavy financial burden on most American families. The burden will be borne disproportionately by lower-income Americans, whose already stretched paychecks are most affected by price fluctuations, especially on necessities like food and gasoline.
In another worrisome sign, new data from the Labor Department, which tracks wholesale inflation, showed on Thursday that food prices rose 1% in July — the fastest increase in four months. That measure, known as the producer price index, captures price movements at the retail level before they reach consumers, so it can signal price increases for businesses and consumers.
June 28, 2022 People shop for produce at a store in Rosemead, California. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
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Seema Shah, chief global strategist at Major Global Investors, said: “Inflation is only spiraling at an alarming rate.” “Food and energy inflation are the wild cards. Although inflation has recently peaked, the spread and stickiness of price pressures will push headline CPI down to just 6.5% this year, before recession accelerates the decline in 2023.”
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