Apr 10, 2024 - Economy

March CPI: The good and bad news about food inflation

U.S. food inflation
Data: BLS; Chart: Deena Zaidi/Axios Visuals

It's getting increasingly cheaper to eat at home, even if eating out is not.

Driving the news: The consumer price index (CPI) index jumped by a faster-than-expected 3.5% last month, data showed on Wednesday. That was faster than Wall Street expected, and well above what Federal Reserve policymakers would like to see.

  • However, food prices rose marginally, with the "at home" (ie groceries) category flat from the previous month, the Bureau of Labor Statistics reported.
  • Overall, prices were up 2.2% year over year, which may bring some comfort to inflation-weary consumers as the price pressures of key food staples moderate.

Yes but: Although food at home prices rose by 1.2% in March, the dining out (or food away from home) category soared a whopping 4.2% year over year, down only slightly from 4.5% from February.

By the numbers: Three of the six major grocery store food group indexes dipped over the month, while the remaining three saw rising prices.

  • Index for meats, poultry, fish, and eggs collectively rose by 0.9% in March, boosted by a 4.6% surge in the egg component.
  • Meanwhile, a steep 5% drop in butter prices helped cool other food at home prices, which fell by 0.5% during the month.
  • Cereals and bakery products index experienced the largest monthly drop, tumbling 0.9% last month.
  • Nonalcoholic beverages rose by 0.3%, while fruits and vegetables increased by 0.1%.

What they're saying: ""What you will find is, if you go deeper into those numbers, the opportunities at grocery stores are improving significantly, but it is restaurants where we are still seeing a bit of high inflation," Agriculture Secretary Tom Vilsack told in his recent interview to Bloomberg.

What we're watching: Egg prices after a bird flu outbreak at the largest U.S. producer.

Go deeper