By Kevin Theissen
If you’ve been to the grocery store recently, you’ve noticed sharp increase in prices. The effects of the Covid-19 pandemic are still affecting global supply chains. Recent U.S. inflation levels have surpassed 9% year-over-year in June, according to Statista.
The price of eggs rose 33% between June 2021 and June 2022 and butter (21%), flour (19%), chicken (18%) and milk (16%) had some of the highest price increases. While in the fall of 2021, cars and red meats were products driving inflation, those prices have stabilized compared to other products. Food price increases in general stayed above average at 10.4%, with shop prices that rose by 12.2% outdoing food outside the home expenses which only rose by 7.7%.
Dairy was one of the food classes most affected by inflation, becoming more than 13.5% more expensive over the course of a year. Fresh vegetables increased in price more moderately at an additional 6.5%.
Food and energy are usually considered the most volatile items in the CPI. Oil products especially experienced huge price volatility throughout the coronavirus pandemic. Still, price dips due to Covid-19 have been compensated and surpassed by a large margin. While the price of energy was up by 41.6% over the last 12 months and 24.5% in the year before that, it had also fallen by 12.6% between June 2019 and June 2020. Yet, even when subtracting the increasingly pricey food and energy categories, an annual increase of 5.9% remains out of the overall CPI increase of 9.1%.
Kevin Theissen is the owner and financial advisor of HWC Financial in Ludlow.