Menu prices rose last month at just half the rate clocked in June, but the increase was still double the inflation pace for grocery prices, according to the latest pricing update from the federal government.
Overall, according to the U.S. Bureau of Labor Statistics (BLS) Wednesday, the Consumer Price Index increased by 0.2%, after falling by a tenth of a point in June and flattening in May. The biggest drivers were fuel oil costs, which spiked 0.9%, and housing costs, which climbed 0.4%. About 90% of the increase in the overall CPI came from the jump in shelter expenses, BLS noted.
The cost of food prepared outside of homes increased in July by 0.2%, compared with a rise of 0.4% in June. The uptick left menu prices about 4.1% above where they were at the end of July 2023.
In contrast, grocery prices edged upward by 0.1%, leaving the cost of food prepared at home just 1.1% above the year-ago level.
Restaurants have been struggling to maintain traffic levels following several years of menu-price inflation. The consensus is that sticker shock is prompting consumers to curtail their dining out and cook more at home. The pattern is contrary to the usual inflationary response of trading down to less expensive establishments and striving to spend less per restaurant visit.
The White House crowed that July’s price inflation still lagged behind increases in wages, marking the 17th consecutive month of incomes outpacing the trend in essential costs.
“We have more work to do to lower costs for hardworking Americans, but we are making real progress,” President Biden said in a statement.
The Federal Trade Commission recently disclosed plans to investigate why the prices of supermarket staples like bread and eggs have remained high while their wholesale costs have ebbed.
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