Inflation in the US hit a 40-year high in May, with Americans paying significantly more money for food. According to the Bureau of Labour Statistics, the Consumer Price Index (CPI) rose 8.6% compared to a year ago and up from 8.3% in April.
The cost of food rose 10.1% – the sharpest year-over-year gain since March 1981 – while the at-home category rose 11.9% – the highest increase since April 1979.
Drilling down, the CPI for baked goods and cereal products increased 1.6% in May.
Before seasonal adjustment, the May index for Cereals and Bakery Products was 319.9% of the 1982-84 average, up 11.6% from a year ago. At-home food category was 285.9, up 11.9% from May 2021.
In the UK, fresh food prices leaped 4.5% in May, the highest acceleration rate in more than a decade, and consumers have been warned to face further pain as retailers are forced to pass on the cost of rising energy bills and supplies.
According to the British Retail Consortium and NielsenIQ, ambient food rose by 4% for the month.
It’s likely to get worse before it gets better, with a further jump in energy costs expected in October.
Cereals and cereal products
The Price Index in May was 263.8, up 1.9% from April and up 12.8% from May 2021
- Flour and prepared mixes: 274.3, up 2.1% from April and up 13.7% from the previous year
- Breakfast cereal: 256, up 1.3% from the previous month and up 12.2% from a year ago
- Rice, pasta and corn meal: 275.4, up 2.5% from April and up 12.8% from May 2021
The May CPI was 352.3, up 1.5% from April and up 11.1% from May 2021
- Bread: 210.3, up 0.5% from April and up 8.7% from May 2021
- White bread: 379.3, up 0.6% from April and up 8.1% from May 2021
- Other than white: 412.4, up 0.4% from April and up 9.2% from a year ago
- Fresh biscuits, rolls and muffins: 205.6, down 0.2% from April but up 9.7% from May 2021
- Cakes, cupcakes and cookies was 335, up 3.1% from April and up 11.8% from May 2021
- Other bakery products: 318, up 2% from April and up 13.4% from May 2021
- Fresh sweet rolls, coffee cakes and doughnuts: 361.3, up 1.1% from April and up 10.6% from May 2021
- Crackers and cracker products: 375.6, up 1.9% from April and up 14.6% from May 2021
- Frozen and refrigerated bakery products, pies, tarts and turnovers: 309.1, up 1.7% from April and up 14.6% from 2021
On a 12-month basis, meats, poultry, fish, and eggs led the food spike – with eggs specifically up a whopping 32.2%. Dairy and related products followed close, with milk up 15.9%.
These escalating prices meant workers took another pay cut during the month, with real wages falling 0.6% from April and down 3% on a 12-month basis.
The runaway inflation has been pinned on supply chain issues related to the COVID pandemic, Brexit, imbalances created by outsized demand for goods over services and the Russian attack on Ukraine.