Egg prices continue to soar by nearly 20%, new inflation data shows
(NEW YORK) — Slow and steady may win the race for a tortoise vs. a hare, according to Aesop’s Fables. However, in reality, this turn of phrase does not ring true when applied to the gradual climb of consumer prices, especially with the latest exorbitant cost increases on items like eggs.
Egg prices soar nearly 20% since last year
The latest data from the Bureau of Labor Statistics showed prices on some household staples rose slightly slower than the overall rate of inflation, but food prices once again spiked upwards in July by 2.2% compared to last year.
Despite a dip in prices for rice, flour, and fish, the cost of a carton of eggs has been steadily on the rise, with a 19% increase from July 2023.
Since June, the price of eggs shot up 5.5% month-over-month.
The consistent increases have been attributed to a combination of factors, largely including a supply-driven price spike as a result of avian flu outbreaks that have wreaked havoc on poultry farms nationwide.
Earlier this spring, with a resurgence of highly pathogenic avian influenza (HPAI) in egg-laying flocks, the United States Department of Agriculture’s Animal and Plant Health Inspection Service reported that 13.64 million table egg-laying hens had been lost to the disease since the beginning of November.
(NEW YORK) — Consumer prices rose 2.9% in July compared to a year ago, cooling slightly from the previous month and extending a monthslong slowdown of price increases. The fresh inflation reading outperformed economists’ expectations, reaching its lowest level since 2021.
Inflation has slowed for five consecutive months, reversing a surge in prices that took hold at the outset of this year. Price increases have cooled significantly from a peak of more than 9%, but inflation remains a percentage point higher than the Fed’s target rate of 2%.
The latest inflation data will further ease pressure on consumers saddled by a yearslong bout of elevated price increases. Despite the ongoing slowdown, consumer prices remain roughly 20% higher than where they stood three years ago.
Prices for some household staples are rising slower than overall inflation. Food prices increased 2.2% in July compared to a year ago, while energy prices inched upward 1.1%, U.S. Bureau of Labor Statistics data showed.
Prices for rice, flour and fish fell in July compared to a year ago. Prices for eggs, however, soared 19% over that period, data showed.
The latest inflation data arrived within days of a dramatic bout of market turmoil triggered in part by heightened pessimism about the chances of a “soft landing,” in which the U.S. averts a recession while inflation returns to normal levels.
The unrest on Wall Street followed a weaker-than-expected jobs report that indicated the economy may be slowing down more quickly than previously known.
Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment. Market observers are split roughly down the middle about whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
A monthslong stretch of good news for inflation alongside bad news for unemployment has prompted the Fed to give additional consideration to its goal of keeping Americans on the job, Fed Chair Jerome Powell said last month.
“For a long time, since inflation arrived, it’s been right to mainly focus on inflation. But now that inflation has come down and the labor market has indeed cooled off, we’re going to be looking at both mandates. They’re in much better balance,” Powell said at a meeting of The Economic Club of Washington, D.C.
“That means that if we were to see an unexpected weakening in the labor market, then that might also be a reason for reaction by us,” Powell added.
The weak jobs report released earlier this month appeared to align with that hypothetical situation described by Powell.
Speaking at a press conference in Washington, D.C., in late July, before the jobs report, Powell said the central bank may reduce interest rate cuts in September, depending on economic performance.
“We’ve made no decisions about future meetings and that includes the September meeting,” Powell said. “We’re getting closer to the point at which we’ll reduce our policy rate, but we’re not quite at that point yet.”
(NEW YORK) — Inflation is down significantly from its 9.1% pandemic-era peak in 2022, but the cost of food — especially groceries — may continue to puzzle some consumers at checkout lines as new data showed two major categories with slight price increases.
Despite signs of overall inflation cooling compared to a year ago, the current rate of 2.9% remains higher than the Federal Reserve’s target.
The latest Consumer Price Index report for August, released by the Bureau of Labor Statistics on Wednesday, showed that while inflation has softened, staples such as groceries are up 1.1% compared to 2023 with higher prices on some common household products like eggs and meat, poultry and fish.
Breaking down the latest inflation data on food and grocery prices
The food index, which is comprised of food away from home and food at home, has increased 2.1% over the last year — and after rising 0.2% in each of the previous two months, was up another 0.1% in August.
There was a slight 0.3% drop last month for takeout and dining, according to the CPI, but food at home remained unchanged.
“Food away from home slowed a little bit at 3.9% year over year, versus that .9% for the food at home category,” Dr. Michael Swanson, Wells Fargo’s Chief Agriculture Economist, told ABC News. “So they’re both slowly kind of trending back down, but still, that’s a big gap and it’s been a pretty persistent gap, which really speaks to the wages at the restaurant level.”
He reminded that “if you can bring yourself to spend a little time prepping food or cooking food at home, you’re going to save yourself a lot of money.”
Grocery prices slowly rise in two major categories, what it means
Food at home rose at a slower pace than overall inflation at .09% over the last year, but two of the six major grocery store food groups — meats, poultry, fish, and eggs — rose last month and by 3.2% over the last 12 months.
The popular animal proteins went up 0.8% in August and eggs increased 4.8%, as dairy and related products increased 0.5% in August.
“When we see a category like eggs where it came in at $3.20 for a dozen at the national number — vs. a year ago in August where it was $2.04 and the answer is, why?” Dr. Swanson posited. “We know that we dealt with avian influenza early in the year, barns are being repopulated, but we’re not right back to where we were previously. So there’s a good, clear story about what happened there.”
“The big dollar category is meat, poultry and eggs — of the food at home category — which had the two worst performers across the entire supermarket,” Swanson said. “It wasn’t really that the ranchers got more money or the wholesalers got more money this month, we saw the retailer spreads move up.”
Food price predictions as we inch towards fall, holidays
Swanson likened food price fluctuations to seasonal weather patterns that yield long term benefits: “For example, how much snow did you get in California and will there be enough melt and water to fill the reservoirs to then be able to grow more strawberries.”
“We’re gonna have the biggest corn and soybean crop ever in the history of United States, according to the USDA,” Swanson said, which he explained has dropped the prices “way down from a year ago.” He continued, “that’s really important to the consumer ultimately, because that’s what impacts [the price of] chickens, beef and everything else — so there’s good news, but it’s not here just yet.”
How grocers are meeting shopper demand for lower prices
“No retailer simply gives you money, if they’re going to give you lower prices or better value, it’s because they went out and fought with their suppliers to get it for you,” he explained.
“What we’re seeing in that universe of wholesalers and food manufacturers, they’re starting to get a lot more pressure from the retailers to say, ‘Help me out here, because I need to do more for our shoppers,'” Swanson said. “It’s a slow process, but it’s been a complete tide shift in mentality and so all the retailers, to some degree have gone back to say, ‘You just have to do better than that.'”
Swanson found in looking at the Federal Reserve Board which tracks capacity utilization in food manufacturing, that “during the peak of the crisis — they didn’t have any spare capacity, so they weren’t interested in negotiating with food retailers like Walmart.”
Since that’s no longer the case, Swanson said we’re starting to see “a little bit more and more slack” which makes wholesalers “more susceptible to arm twisting from the food retailers.”
(NEW YORK) — CosMc’s, a new small-format beverage-led concept from McDonald’s, has officially opened in San Antonio, Texas.
Starting Thursday, patrons in the Alamo City will be among the first to try the new “out-of-this-world beverage experience” from the McDonad’s universe.
“The extraterrestrial experience will continue August 10-11 for the CosMc’s San Antonio official grand opening from 10 am – 4 pm where fans will have the opportunity to try free samples of menu items and receive exclusive merch for the first 100 customers each day,” the company said in a press release.
The first CosMc’s restaurant features “an outdoor patio with eye-catching elements that come alive at dusk.”
There will be a CosMc’s drive thru, kiosks, counter service, walk-up and in-app ordering available to customers at the new location.
With four locations open at launch — in Bolingbrook, Illinois, and Arlington, Dallas and Watauga, Texas — another six are set to open across the Dallas and San Antonio metro areas in the coming months, according to the company.
The expansive menu of drink offerings, all of which can be personalized, includes the Sprite Moonsplash, a sparkling Sprite plus citrus and sweet vanilla flavors that’s served with dried blueberries and a lemon wheel over ice, as well as other items like the Sour Cherry Energy Burst and Churro Cold Brew Frappé.
Customers can opt for add-ons like fruity popping boba or energy shots to an array of menu items.
Other fan favorite options available at CosMc’s include Hazelnut Mocha Cold Brew, Popping Pear Slush, Sour Tango Lemonade and small bites.