The Consumer Price Index for food-at-home showed a 0.3% increase in August, as prices for commodities like fruits, vegetables and meats rebounded from deep deflation a year ago, the Bureau of Labor Statistics reported Thursday.
The CPI index — a proxy for retail grocery inflation — however was unchanged from July, when it turned positive for the first time in 19 months, indicating that retailers may be slow in passing along higher costs to shoppers and triggering margin pressure.
Four of the six major grocery store food group indexes increased versus last August, but none more than 1%, the Bureau said. The indexes for cereals and bakery products and for nonalcoholic beverages fell slightly over the span.
“We believe the rising food costs are getting passed through with little lag — particularly within the commodity categories,” Shane Higgins, a Deutsche Bank analyst, said in a research note, adding that he expected the index to improve to 0.5% to 1.3% between now and January. “While improving inflation is welcome, it still looks modest, particularly relative to rising costs, especially labor.”