Falling prices at the grocery store are gaining momentum as May marked the fourth month in a row with a lower food-at-home index as measured by the Labor Department.
Grocery prices appear to have hit their peak in the current inflation cycle and are now deflating, dropping since January.
The price of flour dropped 1.7 percent in May, rice and pasta fell by 1.6 percent, beef roasts dropped 2.6 percent and eggs dropped 0.4 percent. The price of select condiments fell by as much as 6 percent.
Overall inflation in the consumer price index stayed even between April and May, advancing 3.25 percent from a year ago, which is above the Federal Reserve’s target rate of 2 percent.
The easing prices follow elevated interest rates by the Federal Reserve, which the central bank has held between 5.25 and 5.5 percent for nearly a year.
They also follow some moves by the Biden administration directly targeting the grocery business.
In March, the Federal Trade Commission (FTC) released a report that called out elevated profits in the grocery business and recommended further consideration of the sector from policymakers.
The report called out price-gouging and “casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs.”
Producer prices for groceries declined in April but rose in March even as consumer grocery prices declined, suggesting businesses may be feeling the pressure of increased scrutiny and reducing their margins.
Corporate profits soared following the fiscal and monetary stimulus measures enacted in response to the pandemic, contributing to a cost-of-living squeeze that has left most Americans in a sour mood about the economy.
In a statement, President Biden touted Wednesday’s inflation data as well as his administration’s efforts in the grocery sector.
“Prices are still too high, but today’s report shows welcome progress on lowering inflation,” Biden said. “Core inflation is at its lowest level since April 2021 [and] grocery prices have fallen for four months in a row.”
“I know many families are feeling squeezed by the cost of living, which is still too high. That is why I am … calling on grocery chains making record profits to lower grocery prices,” he said, listing other initiatives he’s made on pricing.