The U.S. Bureau of Labor Statistics’ Consumer Price Index released June’s results on Friday and retail prices as indicated in the food at home category deflated by 0.1% over the past year ended June 2017.
Retail prices also dipped 0.1% in the month of June; nonalcoholic beverages and dairy products contributed to this drop with each sector registering price declines of 0.6% and 0.5% respectively in June.
Those subdivisions were joined by cereals and bakery products as well as fruits and vegetables which each declined 0.1% as well.
Meats, poultry, fish and eggs went the opposite direction in the month of June, climbing upwards .6%. Beef alone finished at 2.9% growth.
The overall deflationary performance continued a trend that has been brewing for over a year.
Though categories such as nonalcoholic beverages, dairy and fresh produce were detractors in June, they’ve increased over the past 12 months, the Bureau of Labor Statistics report says.
“The CPI Food-at-Home index has been deflationary for the past 19 months, much longer than the last deflationary period, which was just nine months (July ’09 – March ’10),” said Shane Higgins, research analyst at Deutsche Bank in a report. “Based on the recent weighted-average food PPI data, which has been positive for the past four months, we expect modest grocery-level inflation to return later this year, which should provide much-needed relief to the grocers.”
The analyst team at RBC Capital markets is bullish on inflation’s return to the food at home world and expects a comeback as early as July. The confidence is due in part to the improving situations in beef, poultry, seafood and eggs.
Though current prices are trending downwards, food away from home is still headed northwards. The sector has risen 2.2% over the past year ended June. This puts the food index overall at 0.9% for the year.