The latest consumer price index shows that grocery bills went higher. Given the trend, it’s possible that the said prices will only keep going up.
The monthly consumer price index released by the Bureau of Labor Statistics on Tuesday showed a 6% rise in March. This is considered to be the largest one-month increas in almost 10 years. In the past year alone, prices have gone up by 2.6% overall.
Last month, the price of gas went up by 9.1%. Since February, the prices of fruits and vegetables increased by nearly 2%, while meat, fish, poultry, and eggs’ prices went up by 0.4%.
This increase comes following the price increase that already happened during last year’s pandemic when stockpiling and disruptions in the supply chain never stopped. Now, many consumers notice their inflating receipts.
Certain areas of the country feel these price increases more acutely. For example, people in Boston and Philadelphia pay a dollar more for every pound of bacon. Meanwhile, Chicago pays 70 cents more for the same thing. Dallas, on the other hand, is experiencing price hikes of over 5% for several items.
These price increases also cause pressure on grocery profit margins. Many manufacturers have held back on releasing promotions or coupons ever since the stock-up period last year.
Additionally, economists say the burden of rising gas prices, an increase in commodity prices, more imports from China, heavy damages incurred by Midwest crops, as well as other factors are being passed on to consumers.
Increase of Production Costs Means Higher Grocery Bills
According to Isaac Olvera, an ArrowStream agricultural economist, said that supply chains remain to be inefficient at the moment due to the fallout connected to the pandemic.
Given these factors, grocery prices will likely remain high for the rest of the year, according to Olvera. Eventually, he said, producers would manage to increase output to balance out the increase in demand. However, Olvera also stated that this might not happen until nearer the end of the year.
On Monday, the White House said it expects the inflation rate to rise.
In a blog post, Jared Bernstein and Ernie Tedeschi, who are two of President Joe Biden’s economic advisers, wrote that the rate of increase seems faster when it starts at a lower level. They also think inflation will go up “modestly” then go back down at a slower pace.
The price hikes could potentially add to food insecurity during a time when over 9 million people remain unemployed.