Inflation has started to ease, very slightly. However, the most recent consumer price index, for February, still posted an increase well above the 2% pace the Federal Reserve has set as its goal. For February, the CPI rose 6% year over year, and 0.4% compared to the previous month.
One way the Bureau of Labor Statistics measures inflation is to back out food and fuel prices. Based on this yardstick, inflation rose 5.5% in February compared to the same month last year. This was the smallest year-over-year increase since December 2021. However, this approach can be misleading. Food and fuel prices are some of the stiffest cost of living headwinds Americans face. In February, fuel prices rose 5.2%, and food was up by 9.5%, though fuel prices rose higher while the increase in food prices was slower.
Still, a review of the CPI item by item shows how badly food price increases have hurt Americans and continue to do so and several food prices spiked. The price of eggs rose 55% in February compared to the same month last year. One cause of this is not one that traditionally drives inflation. Avian flu has killed millions of chickens in the past year, driving egg production down sharply. (Here is the price of a dozen eggs every year since 1973.)
The price of butter was up 20% in February. Frozen fruits and vegetable prices rose about 16%. White bread prices rose at the same pace. The prices of cereal and bakery products were up about 14%. These are staple of the American diet, and most cannot be replaced with other foods. Trapped by the high cost of eating, which in turn, Americans’ cost of living continues to rise, and it is often not matched by pay increases. (Here is how fast food prices rose and fell in 2022.)
Americans are faced with an inflation problem that they cannot fix. So far, neither can the federal government. The Federal Reserve continues to raise rates, as it did through last year. The inflation rate has been blunted, but not by very much.
To determine the household items that are soaring in price, 24/7 Wall St. reviewed the Bureau of Labor Statistics’ Consumer Price Index Summary February report. Prices are compared to February 2022.
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