Contrary to what economists had anticipated, the June 18 update of the Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS) showed that food price inflation actually turned lower in May, with prices for food consumed at home leading the retreat.
The index for all food showed a 0.1% drop for the month of May, following a 0.2% uptick in April. Economists had generally expected the monthly update to show that food prices rose 0.2% during the month. For the 12 months ending with May 2013, food prices have increased 1.4%, according to the BLS report.
Prices for food consumed at home fell 0.3% in May, the largest decline in that index since July 2009. The reading stands in stark contrast to prices for food away from home, up 0.2% for the month. On the year, the index of food away from home is up 2.3%.
Broken down by food category, the index for dairy and related products decreased 0.8%, its third decline in the last 4 months. The indexes for cereals and bakery products and other food at home both turned down in May, falling 0.4% and 0.3%, respectively.
The index for meats, poultry, fish, and eggs, which increased in April, was unchanged in May. In fact, the only grocery store food group index to rise was fruits and vegetables, which increased 0.4% in May after a 1.4% decline in April; the fruits and vegetables index has risen the most of the six at-home food categories over the past year, increasing 2.1%.
Energy prices, not surprisingly, have shown far more volatility over the past year than have the other items measured in the CPI. Since November, for example, the monthly percent change for the energy CPI has ranged from -4.3% in April 2013 to a +5.4% in February (see figure).
The index for all items less food and energy increased 0.2% in May after rising 0.1% in both March and April. The shelter index rose 0.3% in May, its largest increase since July 2011; the index for rent rose 0.3% and the index for owners’ equivalent rent increased 0.2%.