The sharper decline in consumer food prices in March is a clue to weak sales at supermarkets and other retailers that sell food—as well as welcome news for household budgets.
Falling food prices partly explain the weak retail sales results in March at grocery stores, which were flat month-to-month and up just 1.1% from a year ago. See this post.
Prices for food at home are now down -0.5% from a year ago and on a year-to-date basis. This is on trend with the MacroSavvy™ forecast for food prices at the start of the year. See posts about the forecasts and the Macro Insights Overview.
The falloff in food prices coincided in March with a letup in price pressures on consumers in terms of the so-called core inflation rate:
- The core inflation rate—which excludes food and energy—edged lower to 2.2% year-to-year. This is notable because the rate had edged higher during the prior fourth months.
- The price letup outside of food is focused in apparel, household furnishings, telephone costs, and recreational goods.
- Although energy prices remain 12% lower than a year ago, they did edge higher in March led by gasoline prices.
- Price pressures remain focused in services, including rent and house payments, medical services, prescription drugs, education, and recreational services.
See the table summary for more detail.
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