U.S. consumers are already grappling with historically high food prices. It still stands to get worse.
Prices paid to U.S. producers for finished consumer foods jumped nearly 16% in the year through July, the biggest surge since 1974, according to Labor Department data released Thursday.
A good chunk of that was due to a 44.2% rise in the cost of eggs, plus substantial increases in the prices of fresh and dry vegetables as well as beef and veal.
That’s an ominous sign for Americans who are already doling out much more for groceries, because producer prices tend to eventually filter through to consumers.
Overall, consumer and producer prices both moderated in July, but it was largely due to a drop in energy costs.
Food prices remain stubbornly high and risk keeping inflation elevated.
Food prices have risen globally since Russia’s invasion of Ukraine reduced grain shipments from one of the world’s top suppliers.
While some exports have resumed, the pace remains well below normal.
“Food inflation shows little sign of abating,” Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note.
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