Prices of common food items such as meat and eggs spiked across the U.S. last month, with many Americans facing unemployment or furloughs due to the coronavirus also confronted with higher costs for staple items.
Labor Department data released Tuesday indicated that average U.S. grocery prices spiked 2.6 percent in April, the largest one-month jump the agency has registered since the mid 1970s. According to the data, price increases affected a wide range of goods from seafood to cereal and prepackaged food.
The surge came amid an overall decline in the price of U.S. consumer goods: According to the Labor Department, April’s 0.8 percent decline in the consumer price index marked the largest drop since December 2008, amid the Great Recession.
Meat, eggs and poultry saw the largest one-month increase in average prices, climbing 4.3 percent on average, while vegetables and dairy products rose about 1.5 percent. Baked goods and cereal rose about 2.9 percent, according to the data. Other goods such as apparel, motor vehicle insurance, lodging and airfare all dropped sharply.
This combination along with instability in global oil markets has led to an overall price increase of about 0.3 percent for the past 12 months, the smallest yearlong increase since October 2015.
Many supermarket chains around the country have reported shortages of common household goods and various foods, while some chains including Costco and Kroger have moved to limit customers’ purchase of items such as fresh pork and beef.
“We feel good about our ability to maintain a broad assortment of meat and seafood for our customers because we purchase protein from a diverse network of suppliers,” a Kroger representative said earlier this month.
“There is plenty of protein in the supply chain,” the representative added. “However, some processors are experiencing challenges.”
An analyst for the Bleakley Advisory Group told CNBC that issues with the U.S. supply chain, along with steady demand for food that can be made at home, were behind the increases.
“Food price gains were robust as we know there are empty shelves out there,” Peter Boockvar told CNBC. “Demand we know in most areas of the economy has collapsed and prices are falling in response.”
“In areas where demand has hung in, like ‘food at home’ we have inflation because the supply side has been damaged, whether directly via infected facilities or because of the higher costs of finding freight capacity,” he added.
Updated at 11:40 a.m.