Americans only need to look at their grocery bills to see the effects of rampant inflation.
The Bureau of Labor Statistics' April Consumer Price Index (CPI) rose 8.3% compared to the same month last year, inching down from March's 8.5% advance. The cost of food rose 9.4%, with food in the at-home category rising 10.8%. That's the highest increase since 1980, according to Steve Reed, an economist at the U.S. Bureau of Labor Statistics (BLS).
On a 12-month basis, meats, poultry, fish and eggs led the overall spike with an increase of 14.3%, followed by the other food at-home category, which includes sugars, sweets, fastening oil, processed foods, and baby food, which is up up 11%.
The results, which is reached through the work of 477 government workers at grocery stores across the United States, also showed the price of bananas down 0.6 % month-over-month, while oranges were down 0.7%. On the other hand, the price of eggs spiked 10.3% month-over-month, which Reed said may have been due to the impact of bird flu on U.S. farmers.
In 2022, grocery store prices have risen at least 1.0% month-over-month. The increase "is certainly causing pain for U.S. consumers, especially at the lower end of the income spectrum," Zach Griffiths, senior macro strategist at Wells Fargo, told Yahoo Finance.
Relative to pre-Covid levels, food prices at the grocery store are up 15.6% relative to which equates to a 7.0% annualized increase, Griffiths shared.
What's driving prices higher?
Higher energy costs and gasoline also are making grocery items more expensive to produce and "especially transport" with geopolitical conditions exacerbating problems, Reed said.
April's CPI saw electricity per KWH increase 8.6% compared to a year ago. Gasoline spiked 50.4%, and utility (piped) gas per therm increased 23.9%.
The rise in prices seems to be a perfect storm of both local and international pressures, according to Rifle Hughes, Innovation and Strategy Business Partner of JPG Resources, a food and beverage group.
Hughes noted that while "we are no longer seeing the panic buying that we saw during the height of the pandemic," supply chain stresses are taking front and center as they wreak havoc on store shelves, such as with the recent baby formula shortage.
As a result, consumers may be spending more as they look for alternatives in certain categories.
"Take oil shortages, for example. Palm oil is experiencing export restrictions, and without sunflower oil, which largely comes from Ukraine, consumers are forced to try canola or avocado oils. These oils are more expensive, so we're seeing some consumers making tradeoffs for price," Hughes explained.
On top of that, Hughes noted that labor shortages are taking a toll on the supply chain, "from the farm, where ingredients are sourced, to the transportation used to get these products to consumers," he said.
For consumers, Hughes said, it's a question "whether to buy and stock up before prices skyrocket even more, or hold off and hope they come down. It's a gamble."
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
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