Food Prices Fall in March, but Grocery Relief Could be Short Lived – Real Time Economics

Grocery prices, including tomatoes, are falling, the Labor Department said Friday.
Paul J. Richards/Agence France-Presse/Getty Images

Americans saw some price relief last month on their grocery bills, a development that helped hold inflation in check despite an uptick in gasoline prices.

The cost of food at home, Labor Department speak for groceries, fell 0.5% last month. The decline, the largest in nearly six years, was driven by a 1.4% decrease in fruit and vegetable prices.

Everything from apples to bananas to dried peas costs less last month, according to the Labor Department.

But the price break may be short lived.

Food prices are still up 2.3% from a year earlier, a sizable gain compared to nearly non-existent overall inflation. That reflects a drought in the western U.S. that’s dried up crops, especially in California.

As peak growing season nears, there’s no sign of the drought letting up. California Gov. Jerry Brown recently ordered mandatory, statewide water cuts for the first time ever.

Outside of fruits and veggies, several other food products cost less last month, including most meats, dairy, nonalcoholic beverages.

The price of pork fell 2.6%–the largest decrease since July 1983.

The price drop like reflects increased supply following a virus outbreak that killed millions of pigs since the spring of 2013.

In one bit of crummy news, the price index that includes doughnuts rose 2.8% in March, the fattest gain since 1999.

But don’t worry, coffee prices dipped 0.7% in March.

Related Reading

U.S. Consumer Prices Up 0.2% in March

The Fed’s Beige Book: We Read It So You Don’t Have To

WSJ Survey: California Water Rules Won’t Dry Out Growth

 

 


 


for economic news and analysis

for central banking news and analysis


Get WSJ economic analysis delivered to your inbox:


Sign up for the WSJ’s Grand Central, a daily report on global central banking


Sign up for the Real Time Economics daily summary

If the article suppose to have a video or a photo gallery and it does not appear on your screen, please Click Here

17 April 2015 | 2:25 pm – Source: blogs.wsj.com

[ad_2]

Leave a Reply

Your email address will not be published.