Inflation hits shoppers again at the supermarket as egg prices soar – expert warns of four factors fueling grocery bills

AMERICANS are grappling with persistent inflation as the Consumer Price Index (CPI), a key measure of the cost of various goods and services, climbed 0.2% in August.

This uptick underscores ongoing moderate inflationary pressures, leaving shoppers feeling the sting at checkout.

The US Department of Labor released the latest inflation rate, and it was revealed to be up 2.5% from this time last year.

This is down 0.4 percentage points from July and the lowest rate since February 2021.

In addition to the overall CPI data, real earnings showed a positive shift, with average hourly earnings outpacing the monthly CPI increase by 0.2%.

This suggests that wage growth is slightly outpacing inflation, offering some relief to consumers.

GROCERY INSIGHTS

The food index saw a modest 0.1% increase in August, a deceleration from the 0.2% rises observed in the previous two months.

Greg McBride, chief financial analyst at Bankrate, explained this slight change, noting, “Food prices, much like other commodities, can be impacted by a variety of factors outside of the economy such as weather, a good or bad harvest, geopolitical issues, and even things like an outbreak of avian flu.”

He also explained what the increase of food inflation in all areas means, including what is and isn't a typical phenomenon.

“Monthly increases of 0.1% - 0.2% are what we’d consider normal and consistent with a modest pace of food inflation.

"Also normal is that a 0.1% or 0.2% increase in a given month can obscure a wide range of price changes among various food categories, and doesn’t imply that a similarly modest pace of increase applies to each and every category.”

The index for food at home remained unchanged in August, with mixed results across different food categories.

Notably, the index for meats, poultry, fish, and eggs rose by 0.8%, driven by a significant 4.8% increase in egg prices.

NOT TOO EGG-CITING

Egg prices have experienced significant volatility in recent years.

After reaching an all-time high at the end of 2022, prices plummeted before climbing again towards the end of last year.

Despite these fluctuations, consumer demand for eggs has remained robust.

In fact, August saw egg sales surge more than 5% compared to 2023, with producers selling 237 million eggs in the latest four-week period, according to USDA data.

This surge in sales echoes the heightened demand seen during the early days of the Covid-19 pandemic, when consumers stocked up on essential items like eggs and toilet paper.

In addition to strong domestic demand, US egg exports have also risen.

The US Egg Export Council reported a 22% increase in total egg exports for the first four months of the year, reaching 63.5 million dozen eggs.

However, the value of these exports fell by 22%, reflecting lower prices on the global market.

THE IMPACT

Over the past year, inflation-adjusted average hourly earnings have risen by 1.3%, according to a separate release from the BLS.

Overall, energy costs declined by 0.8%.

In other areas of the report, used car prices fell by 1%, medical care services dropped by 0.1%, and clothing prices saw a 0.3% increase.

Additionally, real earnings saw a monthly increase, with average hourly wages growing by 0.2% more than the CPI.

Food prices, much like other commodities, can be impacted by a variety of factors outside of the economy such as weather, a good or bad harvest, geopolitical issues, and even things like an outbreak of avian flu.

As we approach the US Bureau of Labor Statistic's CPI release, the focus will likely remain on these inflationary trends and their implications for monetary policy.

The modest rise in food prices, alongside broader economic indicators, will be critical in shaping future decisions.

In other inflation news, a retail expert has spoken to The U.S. Sun about "slower wage growth" affecting consumers.

Plus, the outlet also previously spoke with Olsen on related topics, such as why so many restaurant chains are closing locations.